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2015-22 Audit Engagement Agreement Alberni Caballero & Fierman RESOLUTION NO. 2015-22 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF AVENTURA, FLORIDA, AUTHORIZING THE CITY MANAGER ON BEHALF OF THE CITY TO EXECUTE AND OTHERWISE ENTER INTO THE ATTACHED AUDIT ENGAGEMENT AGREEMENT BETWEEN THE CITY OF AVENTURA AND ALBERNI CABALLERO & FIERMAN, LLP; AUTHORIZING THE CITY MANAGER TO DO ALL THINGS NECESSARY TO CARRY OUT THE AIMS OF THIS RESOLUTION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Aventura, pursuant to applicable state law, has solicited and reviewed proposals from firms to perform the City's independent audit; and WHEREAS, Resolution No. 2015-19 established a ranking of firms to serve as said auditor and authorized negotiations with the top ranked firm; and WHEREAS, City Staff has negotiated fees and scope of services with the top rated firm (Alberni Caballero & Fierman, LLP) and recommends approval of the Audit Engagement Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE CITY OF AVENTURA, FLORIDA, THAT: Section 1. The City Manager is hereby authorized on behalf of the City of Aventura to execute and otherwise enter into that certain Audit Engagement Agreement between the City of Aventura and Alberni Caballero & Fierman, LLP for auditing services. Section 2. The City Manager is hereby authorized to do all things necessary and expedient in order to effectuate the execution of the attached Agreement described in Section 1 above, and to carry out the aims of this Resolution. Section 3. This Resolution shall become effective immediately upon its adoption. The foregoing Resolution was offered by Commissioner Shelley, who moved its adoption. The motion was seconded by Vice Mayor Holzberg, and upon being put to a vote, the vote was as follows: Commissioner Enbar Cohen Yes Commissioner Denise Landman Yes Commissioner Marc Narotsky Yes Commissioner Robert Shelley Yes Commissioner Howard Weinberg Yes Vice Mayor Teri Holzberg Yes Mayor Enid Weisman Yes City of Aventura Resolution No. 2015- Page 2 PASSED AND ADOPTED this 7th day of April, 2015. / F4-� ENID WEISMAN, MAYOR : Ittli . , J' `� FLAN ATTEST: ELLISA L. HOR WATMMC CITY CLERK APPROVED AS TO LEGAL SUFFICIENCY: bIN L-4.—v--A CITY ATT RNEY AUDITOR AGREEMENT THIS IS AN AGREEMENT, dated the 7 day of April, 2015, by and between: THE CITY OF AVENTURA, a municipal corporation of the State of Florida., with a business address of 19200 W. Country Club Drive. Aventura, Florida 33180,. hereinafter referred to as "CITY," and Alberni Caballero & Fierman, LLP, authorized to do business in the State of Florida. with a business address of 4649 Ponce de Leon Boulevard, Suite 404 Coral Gables, FL 33146, hereinafter referred to as "AUDITORS." WITNESSETH: In consideration of the mutual terms and conditions, promises, covenants and payments hereinafter set forth, CITY and AUDITORS agree as follows: ARTICLE 1 PREAMBLE In order to establish the background, context and form of reference for this Agreement and to generally express the objectives, and intentions of the respective parties herein.the following statements, representations and explanations shall be accepted as predicates for the undertakings and commitments included within the provisions which follow and may be relied upon by the parties as essential elements of the mutual considerations upon which this Agreement is based. 1.1 On January 11, 2015, the CITY advertised its request for proposal No. 15-02-09-2 (hereinafter, "REP") which set forth the CITY's desire to hire a firm to provide: Independent Audit Services for the City of Aventura RFP No. 15-02-09-2 1.2 On February 9, 2015, the responses to the RFP were opened at the offices of the City Manager. 1.3 On March 3, 2015, the CITY Commission selected and ranked four(4) firms from the list of proposers and authorized the CITY Administration to negotiate the terms of an agreement with the highest proposer. 1.4 On April 7, 2015, the CITY awarded the RFP to AUDITORS and authorized the proper City officials to enter into this Agreement with AUDITORS to render the professional services more particularly described herein below. Page 1 of 10 1.5 Negotiations pertaining to the services to be performed by the AUDITORS were undertaken and this Agreement incorporates the results of such negotiation. ARTICLE 2 SERVICES AND RESPONSIBILITIES 2.1 AUDITORS hereby agree to perform the professional auditing services described in request for proposal No. 15-02-09-2 Section III labeled "NATURE OF SERVICES REQUIRED" attached hereto as Exhibit "A." In case of a conflict or a perceived conflict, between the terms and conditions set forth in Exhibit "A" and the AUDITORS Proposal for Annual Independent Audit Services, Exhibit "A" shall govern. 2.2 During the conduct of the audit,AUDITORS shall schedule regular meetings,with the CITY's Finance Director or designee at least weekly to discuss the progress of the work. 2.3 AUDITORS shall furnish all services, labor, equipment, and materials necessary and as may be required in the performance of this Agreement and all work performed under this Agreement shall be done in a professional manner. 2.4 AUDITORS hereby represent to CITY, with full knowledge that CITY is relying upon these representations when entering into this Agreement with AUDITORS, that AUDITORS have the professional expertise, experience and manpower to perform the services to be provided by AUDITORS pursuant to the terms of this Agreement. ARTICLE 3 TIME FOR PERFORMANCE AUDITORS shall perform the services identified in Article 2 and Exhibit "A" hereof and deliver to the CITY in final form the report of the independent auditor, management letter,the single audit report, and any other report as required for each fiscal year by no later than February 15th of each year for the City's Audit and no later than August 19th for the Charter School audit of each year during the term of this Agreement. Minor adjustments to the timetable for completion approved by CITY in advance, in writing, will not constitute non- performance by AUDITORS per this Agreement. Additional services requested by City Manager, or changes in scope, will be reviewed and any impact on the schedule determined and the schedule modified accordingly. Page 2 of 10 ARTICLE 4 DELAY IN PERFORMANCE 4.1 Liquidated Damages for Delay 4.1.1 CITY shall be entitled to retain the sum of One Hundred and Fifty Dollars ($150.00) for each day, or part thereof, that the work remains uncompleted beyond the timetable set forth in Article 3 hereof when such delay is caused by the failure of the AUDITOR to perform as agreed herein. It is recognized and agreed that damages in such events are difficult to ascertain, though great and irreparable, and that this agreement with respect to liquidated damages shall in no event disentitle CITY to injunctive relief and this sum is not construed as a penalty. 4.1.2 Anything to the contrary notwithstanding minor adjustments to the timetable for completion approved by CITY in advance, in writing, will not constitute a delay by AUDITORS for which liquidated damages are due. Furthermore, a delay due to an Act of God, fire, lockout, strike or labor dispute, riot or civil commotion, act of public enemy or other cause beyond the control of AUDITORS shall extend this Agreement for a period equal to such delay and during this period such delay shall not constitute a delay by AUDITORS for which liquidated damages are due. ARTICLE 5 COMPENSATION AND METHOD OF PAYMENT 5.1 CITY agrees to compensate AUDITORS for all services performed by AUDITORS pursuant to the provisions of this Agreement in AN AMOUNT NOT TO EXCEED Forty Nine Thousand Dollars and No Cents ($49,000.00) (the"Fee"). This amount may not be exceeded without a written amendment to this Agreement. This Fee is broken down for each segment of the various required audits as follows: Compensation for City's Annual Audit $38,000.00 These Fees include out-of-pocket expenses and the cost of drafting, typing and binding twenty (20) copies of the Comprehensive Annual Financial Report (CAFR) and providing a "converted" (not scanned) signed electronic copy in PDF. Compensation for Charter School Annual Audit $11,000.00 These Fees include out-of-pocket expenses and the cost of drafting, typing and binding twenty (20) copies of the Audited Financial Statements of the Charter School and providing a "converted" (not scanned) signed electronic copy in PDF. The Fee for subsequent contract years, ending 2016, 2017, 2018 and 2019 will be adjusted from the current contract Fee using the change in the Consumer Price Index for"All Urban Consumers for Miami/Fort Lauderdale, Florida"as published by the U.S. Page 3 of 10 Department of Labor Statistics or its successor agency for the twelve (12) months ending July of each year to be effective for the next engagement. 5.2 Method of Billing and Payment. 5.2.1 AUDITORS shall be entitled to invoice monthly based on the hours of work completed during the course of the engagement and out-of-pocket expenses incurred as accepted by CITY. Invoices shall be submitted in sufficient detail to demonstrate compliance with the terms of this Agreement. 5.2.2 CITY will make its best efforts to pay AUDITORS within thirty (30) days of receipt of proper invoice the total shown to be due on such invoice. 5.2.3 Payment will be made to AUDITORS at: Alberni Caballero & Fierman, LLP 4649 Ponce de Leon Boulevard, Suite 404 Coral Gables, FL 33146 ARTICLE 6 CHANGES IN SCOPE OF WORK CITY or AUDITORS may request changes that would increase decrease or otherwise modify the Scope of Services to be provided under this Agreement. Such changes must be in accordance with the provisions of the Code of Ordinances of the CITY and must be contained in a written amendment, executed by the parties hereto. with the same formality and with equality and dignity prior to any deviation from the terms of this Agreement, including the initiation of any extra work. In no event will the AUDITORS be compensated for any work which has not been described in a separate written agreement executed by the parties hereto. Provided, however, notwithstanding the foregoing if the addition of such additional services will not exceed the Fee set forth in 5.1 above and the AUDITORS agree to be compensated in accordance with the hourly rate set forth in Exhibit "B" the City Manager may authorize such additional work in writing. ARTICLE 7 MISCELLANEOUS 7.1 Ownership of Documents. Reports, surveys, studies and other data provided in connection with this Agreement are and shall remain the property of CITY whether or not the project for which they are made is completed. 7.1.1 AUDITORS further acknowledge that CITY may post its audited financial statements on CITY's website. Such statements may be posted by CITY without the prior authorization of AUDITORS. No additional fee or compensation will be paid to the AUDITORS by CITY for such posting. Page 4 of 10 7.1.2 The CITY will include its audited financial statements in any offering statement without the prior authorization of the AUDITORS. AUDITORS acknowledge that they will assist and provide their services to CITY, at no additional expense to CITY, in the event that CITY requests AUDITORS to review and provide comments on the unaudited material or information associated with any audited financial statement which is included in an offering statement related to any bond transaction of CITY. 7.2 Term and Termination. 7.2.1 This Agreement may be terminated by either party for cause, or by the CITY for convenience, upon thirty(30) days written notice by the CITY to AUDITORS in which event the AUDITORS shall be paid their compensation for services performed to termination date. In the event that the AUDITORS abandon this Agreement or cause it to be terminated, they shall indemnify the CITY against any loss pertaining to this termination up to a maximum of the full contracted fee amount. All finished or unfinished documents, data, studies, surveys and reports prepared by AUDITORS shall become the property of CITY and shall be delivered by AUDITORS to CITY. 7.2.2 This Agreement shall take effect as of the date of award by the City Commission and shall end upon the AUDITORS completion of the work described herein, however, such date shall not be later than no later than February 15, 2017 for the City's Audit and no later than August 19, 2017 for the Charter School audit. Thereafter, this Agreement may be renewed for three (3) additional one (1) year periods subject to Agreement by both parties, and providing that all terms, conditions and specifications remain the same. 7.3 Records. AUDITORS shall keep books and records and require any and all subcontractors to keep books and records as may be necessary in order to record complete and correct entries as to personnel hours charged to this engagement, and any expenses for which AUDITORS expect to be reimbursed. Such books and records will be available at all reasonable times for examination and audit by CITY and shall be kept for a period of three (3) years after the completion of all work to be performed pursuant to this Agreement, unless contacted by CITY and advised such records must be kept for a longer period. AUDITORS shall further be required to respond to the reasonable inquiries of successor auditors and allow successor auditors to review AUDITORS' working papers related to matters of continuing accounting, reporting or auditing significance. Incomplete or incorrect entries in such books and records will be grounds for disallowance by CITY of any fees or expenses based upon such entries. Page 5 of 10 7.4 Indemnification. 7.4.1 The AUDITORS shall protect, defend, reimburse, indemnify and hold harmless the CITY and the CITY'S officers, agents and employees free and harmless from and against any and all claims, losses, penalties, damages, settlements, costs, charges, attorneys or other professional fees, or other expenses or liabilities of every kind and character arising out of or relating to any and all claims, liens, demands, obligations, actions or proceedings directly or indirectly arising out of or resulting from the mistakes or negligence, gross negligence, willful and wanton acts and the performance of this Agreement by the AUDITORS, or their respective officers, employees, agents, servants, partners or principals. The AUDITORS agree to investigate, respond, adjust and provide a defense for any such claims, demands, and actions at AUDITORS' sole expense and agrees to bear and remain liable for all such other costs and expenses relating thereto, even if such claim is groundless,false or fraudulent. Notwithstanding the foregoing, AUDITORS' indemnity shall not extend to liability for damages to persons or property to the extent such damage was caused by any act, omission, or default of the CITY, or by the CITY'S officers, agents and employees. 7.4.2 The parties recognize that various provisions of this Agreement, including but not necessarily limited to this Section, provide for indemnification by the AUDITORS and that Florida law may require a specific consideration be given therefore. The parties therefore agree that the sum of Ten Dollars and 00/100 ($10.00), receipt of which is hereby acknowledged, is the specific consideration for such indemnities, and the providing of such indemnities is deemed to be part of the specifications with respect to the services to be provided by AUDITORS. Furthermore, the parties understand and agree that the covenants and representations relating to this indemnification provision shall survive the term of this Agreement and continue in full force and effect as to the party's responsibility to indemnify. 7.5 Insurance. 7.5.1 The AUDITORS shall not commence work under this Agreement until they have obtained all insurance required under this paragraph and such insurance has been approved by the City Manager of the CITY nor shall the AUDITORS allow any Subcontractor to commence work on his sub-contract until all similar such insurance required of the subcontractor has been obtained and approved. Page 6 of 10 7.5.2 Certificates of insurance, reflecting evidence of the required insurance shall be filed with the City's Risk Manager prior to the commencement of this Agreement. These Certificates shall contain a provision that coverage's afforded under these policies will not be cancelled until at least forty-five days(45) prior written notice has been given to the CITY. Policies shall be issued by companies authorized to do business under the laws of the State of Florida. The Financial Strength Rating and the Financial Size category must be"B+"and "VI" or higher, respectively according to the latest edition of"Best Key Rating Guide," published by A.M. Best Guide. 7.5.3 Insurance shall be in force until the obligations required to be fulfilled under the terms of the Agreement are satisfied. In the event the insurance certificate provided indicates that the insurance shall terminate and lapse during the period of this Agreement, then in that event, the AUDITORS shall furnish, at least forty-five (45) days prior to the expiration of the date of such insurance, a renewed certificate of insurance as proof that equal and like coverage for the balance of the period of the Agreement and extension there under is in effect. The AUDITORS shall not commence nor continue to provide any services pursuant to this Agreement unless all required insurance remains in full force and effect. AUDITORS shall be liable to CITY for any lapses in service resulting from a gap in insurance coverage. 7.5.4 REQUIRED INSURANCE 7.5.4.1. PROFESSIONAL LIABILITY insurance. Limit of $1,000,000 per occurrence The City does not require AUDITORS to name City as "additional insured" 7.5.4.2. WORKERS' COMPENSATION insurance shall be maintained during the life of this Agreement to comply with statutory limits for all employees, and in the case any work is sublet, the AUDITORS shall require the Subcontractors similarly to provide Workers' Compensation Insurance for all the latter's employees unless such employees are covered by the protection afforded by the AUDITORS. The AUDITORS and their subcontractors shall maintain during the life of this policy Employers Liability Insurance. The following limits must be maintained: Workers' Compensation Statutory Employer's Liability $100,000 — Each Accident $500,000 — Disease-policy limit $100,000 — Disease-each employee If AUDITORS claim to be exempt from this requirement, AUDITORS shall provide CITY proof of such exemption along with a written request for CITY to exempt AUDITORS, written on AUDITORS' letterhead. Page 7 of 10 7.5.4.3 The CITY reserves the right to require any other insurance coverage it deems necessary depending upon the exposures. 7.6 Independent Contractor. This Agreement does not create an employee/employer relationship between the parties. It is the intent of the parties that the AUDITORS are independent contractors under this Agreement and not the CITY's employees for all purposes, including but not limited to, the application of the Fair Labor Standards Act minimum wage and overtime payments, Federal Insurance Contribution Act, the Social Security Act, the Federal Unemployment Tax Act,the provisions of the Internal Revenue Code, the State Workers' Compensation Act, and the State unemployment insurance law. The AUDITORS shall retain sole and absolute discretion in the judgment of the manner and means of carrying out AUDITORS' activities and responsibilities hereunder. The AUDITORS agree that they are a separate and independent enterprise from the CITY, that they have full opportunity to find other business,that they have to make their own investment in their business, and that they will utilize a high level of skill necessary to perform the work. This Agreement shall not be construed as creating any joint employment relationship between the AUDITORS and the CITY and the CITY will not be liable for any obligation incurred by AUDITORS, including but not limited to unpaid minimum wages and/or overtime premiums. 7.7 Assignments; Amendments. 7.7.1 This Agreement, or any interest herein, shall not be assigned,transferred or otherwise encumbered, under any circumstances, by AUDITORS without the prior written consent of CITY. However, this Agreement shall run to the benefit of CITY and its successors and assigns. 7.7.2 It is further agreed that no modification, amendment or alteration in the terms or conditions contained here shall be effective unless contained in a written document executed with the same formality and of equal dignity herewith. 7.8 No Contingent Fees. AUDITORS warrant that they have not employed or retained any company or person, other than a bona fide employee working solely for the AUDITORS to solicit or secure this Agreement, and that they have not paid or agreed to pay any person, company, corporation, individual or firm, other than a bona fide employee working solely for AUDITORS any fee, commission, percentage, gift, or other consideration contingent upon or resulting from the award or making of this Agreement. For the breach or violation of this provision, the CITY shall have the right to terminate the Agreement without liability at its discretion, to deduct from the contract price, or otherwise recover the full amount of such fee, commission, percentage, gift or consideration. 7.9 Notice. Whenever any party desires to give notice unto any other party, it must be given by written notice, sent by registered United States mail, with return receipt requested, addressed to the party for whom it is intended, at the places last specified, Page 8 of 10 and the places for giving of notice shall remain such until they shall have been changed by written notice in compliance with the provisions of this section. For the present, the AUDITORS and the CITY designate the following as the respective places for giving of notice: CITY: Eric M. Soroka, City Manager City of Aventura 19200 W. Country Club Drive Aventura, FL 33180 Telephone No. (305) 466-8910 Facsimile No. (954) 466-8919 Copy To: Weiss Serota Helfman Cole Bierman & Popok, P.L. 200 East Broward Blvd., Suite 1900 Fort Lauderdale, FL 33301 Telephone No. (954) 763-4242 Facsimile No. (954) 764-7770 AUDITORS: Alberni Caballero & Fierman, LLP 4649 Ponce de Leon Boulevard, Suite 404 Coral Gables, FL 33146 7.10 Binding Authority. Each person signing this Agreement on behalf of either party individually warrants that he or she has full legal power to execute this Agreement on behalf of the party for whom he or she is signing, and to bind and obligate such party with respect to all provisions contained in this Agreement. 7.11 Headings. Headings herein are for convenience of reference only and shall not be considered on any interpretation of this Agreement. 7.12 Exhibits. Each Exhibit referred to in this Agreement forms an essential part of this Agreement. The exhibits if not physically attached should be treated as part of this Agreement and are incorporated herein by reference. 7.13 Severability. If any provision of this Agreement or application thereof to any person or situation shall to any extent, be held invalid or unenforceable, the remainder of this Agreement, and the application of such provisions to persons or situations other than those as to which it shall have been held invalid or unenforceable shall not be affected thereby, and shall continue in full force and effect, and be enforced to the fullest extent permitted by law. 7.14 Governing Law. This Agreement shall be governed by the laws of the State of Florida with venue lying in Miami-Dade County, Florida. The parties hereby voluntarily waive any right to trial by jury in any litigation between the parties which, in any way, arises out of or concerns this Agreement or the course of dealing between the parties. Page 9 of 10 7.15 Extent of Agreement. This Agreement represents the entire and integrated agreement between the CITY and the AUDITORS and supersedes all prior negotiations, representations or agreements, either written or oral. IN WITNESS OF THE FOREGOING, the parties have set their hands and seals the day and year first written above. CITY OF AVEN i BY: ■ ATTEST: ERIC M. OROKA, ' NAGER WI /� CITY CLERK APPROVED AS TO F• • / (,--:,,, A� 40.,..\., sA,:.., „..,,,, ,gTi OFFICE OF THE CITY ATTOR EY '' ` 1;: ; 1 � ■AUDIT S c��' WIT SSES: 6;4 °q 5%6 a / . BY: —� 44�/SL,ill1 Print Name: MARIA) f r'-v i Title: PGA/iv, ATTEST: SECRETARY STATE OF FLORIDA ) COUNTY OF BROWARD ) BEFORE ME, an officer duly authorized by law to administer oaths and take acknowledgments, personal) appeared 4��(dr4,,., S, r e f - cc' as ' c r`i- n-Q-e of j) bz.•A i bcito.., c i Q r r•., C L I , Certified Public Accountants and acknowledged they executed the foregoing Agreement as the proper official of GIbk,,; cc . (w,,,,Y.,,,,Elf for the use and purposes mentioned in it and that the instrument is the act and deed of C, L. O, d. J. . IN WITNESS OF THE FOREGOING, I have set my hand and official seal at in the State and County aforesaid on this I) day of 9,, t l , 2015. NOT"Y -urn.' My Commis. • Expires: -pEIp °"1"VEI pC `091191 =;pti'r,`Y s MY coMMIS IIbN6,�/10 2018 .;.i EXe1RENWsrypuwwu f4 Boded Th Page 10 of 10 Exhibit A (Referenced From) INDEPENDENT AUDIT SERVICES FOR THE CITY OF AVENTURA RFP # 15-02-09-2 III. NATURE OF SERVICES REQUIRED A. General The City of Aventura is soliciting the services of qualified firms of Independent Certified Public Accountants to audit the City's financial statements for the fiscal year ending September 30, 2015, and the financial statements of the Aventura City of Excellence Charter School for the fiscal year ending June 30, 2016, and any required Special Reports such as Grants or other compliance reporting, as well as auditing those financial statements and other Special Reports for the subsequent fiscal year. These audits are to be performed in accordance with the provisions contained in this Request for Proposal. B. Scope of Work to be Performed 1. The City desires the independent auditor to express an opinion as to whether the financial statements of the City and the Aventura City of Excellence Charter School chartered by the City and Miami-Dade District School Board, are fairly presented, in all material respects, and with accounting principles generally accepted in the United States of America. 2. The City also desires the auditor to express an opinion on the fair presentation of its government-wide and fund financial statements and schedules in conformity with accounting principles generally accepted in the United States of America. The auditor is not required to audit the supporting schedules contained in the comprehensive annual financial report. However, the auditor is to provide an "in-relation-to" opinion on the supporting schedules based on the auditing procedures applied during the audit of the government-wide and fund financial statements and schedules. The auditor is not required to audit the introductory section of the report or the statistical section of the report. A-1 3. The auditor shall also be responsible for performing certain limited procedures involving required supplementary information required by the Governmental Accounting Standards Board in accordance with auditing standards generally accepted in the United States of America. 4. The auditor is required to audit the schedule of expenditures of federal awards and state financial assistance in accordance with the Federal and Florida Single Audit Act respectively. The auditor is not required to audit the Aventura City of Excellence Charter School for the fiscal year ending June 30, 2015, as the School will be audited by Keefe McCullough & Co., LLP who will furnish their report to the City's principal Independent Auditor during the engagement. C. Auditing Standards to be Followed To meet the requirements of this request for proposals, the audit shall be performed in accordance with: 1. Auditing Standards generally accepted in the United States of America; 2. The standards for financial audits set forth in the U.S. General Accounting.Office's Government Auditing Standards (2011 Revision); 3. The provisions of the Federal Single Audit Act of 1984 (as amended in 1996 and subsequently); 4. The Florida Single Audit Act; 5. The provisions of U.S. Office of Management and Budget(OMB)Circular A-133; 6. Audits of States, Local Governments, and Non-Profit Organizations, Audits of State and Local Governments (Revised) —AICPA. 7. Section 11.45, Florida Statutes; 8. State of Florida Department of Banking and Finance Regulations; 9. Rules adopted by the State of Florida Auditor General for form and content of governmental unit audits; 10.Any other applicable Federal, State and local laws or regulations; Any updates of, or amendments to, these described auditing standards are to be incorporated in future audits performed by the selected auditor A-2 performing auditing engagements for the City in future fiscal years. D. Reports to be Issued Following the completion of the audit of the City's financial statements for the fiscal year ending September 30th' and subsequently, following the completion of the audit of the Aventura City of Excellence Charter School's financial statements for the fiscal year ending June 30th, the auditor shall issue: 1. An Independent Auditor's Report on the fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, pursuant to an audit conducted in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 2. An Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an audit of Financial Statements Performed in Accordance with Government Auditing Standards. 3. If applicable, an Independent Auditor's Report on Compliance for Each Major Federal Program and Major State Project; Report on Internal Control over Compliance and Report on the Schedule of Expenditures of Federal Awards and State Financial Assistance required by OMB Circular A-133, Section 215.97 Florida Statutes, and Chapter 10.550, Rules of the Auditor General. 4. An Independent Auditor's Report to City Management in Accordance with Audits of States, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of the Florida Auditor General. 5. In the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters, the auditor shall communicate any material weakness found during the audit. A material weakness is a deficiency, or combination of deficiencies in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. The reports on compliance and internal controls shall include all instances of noncompliance. A-3 Irregularities and illegal acts. The auditors shall be required to make an immediate, written report to the Finance Director and City Manager of all irregularities and illegal acts or indications of illegal acts of which they become aware. Reporting to the Finance Director and the City Manager. Auditors shall also disclose the following: a) The auditor's responsibility under auditing standards generally accepted in the United States of America, and assurances that the independent auditor is currently licensed, and that the members of the audit team have the minimum required Continuing Professional Education credits required for performing audits under Governmental Auditing Standards. b) Significant accounting policies. c) Management judgments and accounting estimates. d) Significant audit adjustments. e) Other information in documents containing audited financial statements. f) Disagreements with management. g) Management consultation with other accountants. h) Major issues discussed with management prior to retention. i) Difficulties encountered in performing the audit. E. Special Considerations 1. The City will submit its Comprehensive Annual Financial Report(CAFR) to the Government Finance Officers Association of the United States and Canada for review in their Certificate of Achievement for Excellence in Financial Reporting program. It is anticipated that the auditor will be required to provide any special assistance deemed necessary to the City in order to meet the requirements of that program. 2. The City currently anticipates that it will not issue any official statements in connection with the sale of debt securities. However, if the City determines it to be in their best interest to issue new debt or refinance existing debt the official statements may be required which will contain the general purpose financial statements and the auditor's report thereon. A-4 The auditor shall be required, if requested by the fiscal advisor and/or the underwriter, to issue a "consent and citation of expertise" as the auditor and any necessary "comfort letters." 3. The City owns and operates one (1) charter school that is chartered by Miami-Dade Public Schools. This school is included as a Major Special Revenue Fund of the City, and operates on a fiscal year that begins on July 1st and ends on June 30th. The City is required to undergo a separate audit of the Charter School's financial statements. 4. The Schedule of Expenditures of Federal Awards and State Financial Assistance Projects and related auditor's report, as well as the reports on compliance and internal controls are to be issued as part of the CAFR. 5. A list of findings and other weaknesses from the City's most recent financial statement audit are attached to this document (Appendix A). F. Working Paper Retention and Access to Working Papers All working papers and reports must be retained, at the auditor's expense, for a minimum of five (5)years, unless the firm is notified in writing by the City of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees: City of Aventura Cognizant agency(s) pursuant to OMB Circular A-133 U.S. General Accounting Office (GAO) Auditor General of the State of Florida Parties designated by the federal or state governments or by the City as part of an audit quality review process. Auditors of entities of which the City is a recipient or a sub-recipient of grant funds. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting, reporting or auditing significance. A-5 rAlberni Caballero&Fierman,LLP 4649 Ponce de Leon Blvd Suite 404 Coral Gables, FL 33146 ALBERNI CABALLERO&FIERMAN,LLP T:305.662.7272 F:305.662.4266 ACCOUNTANTS•ADVISORS ACF-CPA.COM IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII March 11, 2015 Honorable Mayor, City Commission and City Manager City of Aventura, Florida 19200 W. Country Club Drive Aventura, Florida 33180 We are pleased to confirm our understanding of the services we are to provide City of Aventura, Florida (The City) for the fiscal years ending September 30, 2015, and 2016 (with the City's option to renew for an additional three (3) one (1) year terms). 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 City as of and for the fiscal years ending September 30, 2015, and 2016. Accounting standards generally accepted in the United States of America provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement The City'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 City'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 Schedules 3) Schedule of Funding Progress—Other Post-Employment Benefits 4) Schedule of Changes in the City's Net Pension Liability and Related Ratios 5) Schedule of City Contributions We have also been engaged to report on supplementary information other than RSI that accompanies The City'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) Combining and Individual non-major fund financial statements and schedules 1 The following other information accompanying the financial statements will not be subjected to the auditing procedures applied in our audit of the financial statements, and our auditors' report will not provide an opinion or any assurance on that other information. 1) Introductory Section 2) Statistical Section Audit Objectives The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America 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 City and other procedures we consider necessary to enable us to express such opinions. If our opinions on the financial statements are 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 opinions, we may decline to express opinions 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 the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The reports on internal control and compliance will each include a paragraph that states that the purpose of the report is solely to describe the scope of testing of internal control over financial reporting and compliance, and the result of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance, and that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance. The paragraph will also state that the report is not suitable for any other purpose. If during our audit we become aware that the City is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with U.S. generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements. Management Responsibilities Management is responsible for the basic financial statements and all accompanying information as well as all representations contained therein. As part of the audit, we will assist with preparation of your financial statements and related notes. You will be required to acknowledge in the written representation letter our assistance with preparation of the financial statements and that you have reviewed and approved the financial statements and related notes prior to their issuance and have accepted responsibility for them. Further, you agree to assume all management responsibilities for any nonaudit services we provide; oversee the services by designating an individual, preferably from senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services; and accept responsibility for them. Management is responsible for establishing and maintaining effective internal controls, including evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; for the selection and application of accounting principles; and for the preparation and fair presentation of the financial statements in conformity with U.S. generally accepted accounting principles. Management is also responsible for making all financial records and related information available to us and for ensuring that management is reliable and financial information is reliable and properly recorded. 2 You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, (2) additional information that we may request for the purpose of the audit, and (3) unrestricted access to persons within the government from whom we determine it necessary to obtain audit evidence. Your responsibilities 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 government involving (1) 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 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 for taking timely and appropriate steps to remedy any fraud, violations of contracts or grant agreements, or abuse that we may report. You are responsible for the preparation of the supplementary information in conformity with U.S. generally accepted accounting principles. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon or make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon. Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the supplementary information in accordance with GAAP; (2) that you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) that 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. 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 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 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. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, you understand that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 3 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 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 may exist and not be detected by us, even though the audit is properly planned and performed in accordance.with U.S. generally accepted auditing standards 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. However, we will inform the appropriate level of management of any material errors, any fraudulent financial reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to 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 Control 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. 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 management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. 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 City's compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective of our audit 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. 4 Engagement Administration, Fees,and Other We understand that your employees will prepare all cash or other confirmations we request and will locate any documents selected by us for testing. We will provide copies of our reports to The City; however, management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. The audit documentation for this engagement is the property of Alberni Caballero & Fierman, LLP 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 regulating authority or its designee, a 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 Alberni Caballero& Fierman, LLP 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 date or for any additional period requested by a regulating authority. If we are aware that a federal awarding agency 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. Andrew S. Fierman, CPA 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 $38,000 for the fiscal year ended September 30, 2015 (not including the Federal Single Audit, if required. See below). Refer to the separate contract for auditing services between the City and Alberni Caballero & Fierman, LLP for the fee increases relating to subsequent contract years. 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. If the City is required to undergo a single audit in accordance with the Federal Single Audit Act and OMB Circular A-133, Audits of States, Local Governments, and Not-for-Profit Organizations, the additional fee will be discussed with the City at that time. Also, a new engagement letter will be provided that meets the requirements of the Federal Single Audit Act and OMB Circular A-133. The additional fee that we ultimately agree to will be 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 addressed in 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. Our audit engagement ends on delivery of our audit report. Any follow-up services that might be required will be a separate, new engagement. The terms and conditions of that new engagement will be governed by a new, specific engagement letter for that service. 5 Parties to this engagement agree that any dispute that may arise regarding the meaning, performance, or enforcement of this engagement will be submitted to mediation upon written request of any party to the engagement. The party requesting mediation shall select the mediation provider from the list of mediation training providers approved by the Florida Supreme Court. The mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Association or such other rules as may be agreed upon by the parties. The results of this mediation shall not be binding upon either party. Costs of any mediation proceeding shall be shared equally by both parties. The venue for any legal proceedings shall be Miami-Dade County, Florida, and this agreement shall be governed by the laws of the State of Florida. Our audit is intended for the benefit of The City. The audit will not be planned or conducted in contemplation of reliance by any third party or with respect to any specific transaction. Therefore, items of possible interest to a third party will not be specifically addressed and matters may exist that would be assessed differently by a third party, possibly in connection with a specific transaction. If you intend to publish or otherwise reproduce the financial statements together with our report (or otherwise make reference to our Firm) in a document that contains other information, you agree to provide us with a draft of the document to read and comment on before it is printed and distributed. Furthermore, you agree that the terms of this engagement do not encompass an undertaking by us (1) to consent, by means of separate letter or otherwise, to the inclusion of our auditor's report on the financial statements referred to above in a filing with a Federal or state regulatory agency or otherwise reissue our report for purposes of a securities offering or other financing transaction, or(2) to acknowledge reliance on our report by others. We appreciate the opportunity to be of service to City of Aventura, Florida 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, (4.12).4.) Andrew S. Fierman, CPA Partner Alberni Caballero& Fierman, LLP RESPONSE: This letter correctly sets forth th- • •e -tanding of he City of Aventura. Authorized signature: Title: C • M 4 Mr Az. Date: , - 6 Alberni Caballero&Fierman,LLP 4649 Ponce de Leon Blvd Suite 404 - Coral Gables, FL 33146 ALBERNI CABALLERO&FIERMAN,LLP T:305.662.7272 F: 305.662.4266 ACF-CPA.COM ACCOUNTANTS•ADVISORS I1 1 11111111111111 11111111111 IlIllIllIllllIIIIIIIIIIIIIIIIIIillllllllllIllllllllllllI March 11, 2015 Honorable Mayor, City Commission and City Manager City of Aventura, Florida 19200 W. Country Club Drive Aventura, Florida 33180 We are pleased to confirm our understanding of the services we are to provide to the City of Aventura, Florida (the City) for audit of the Aventura City of Excellence Charter School (the School) for the fiscal years ended June 30, 2016 and 2017. We will audit the special purpose financial statements of the governmental activities and the major fund, which collectively comprise the basic financial statements of The School as of and for the fiscal years ended June 30, 2016 and 2017. Accounting standards generally accepted in the United States of America provide for certain required supplementary information (RSI), such as management's discussion and analysis (MD&A), to supplement The School's 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 School'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 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. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America 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 School and other procedures we consider necessary to enable us to express such opinions. 1 If our opinions on the financial statements are 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 opinions, we may decline to express opinions 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 the provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The reports on internal control and compliance will each include a paragraph that states that the purpose of the report is solely to describe the scope of testing of internal control over financial reporting and compliance, and the result of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance, and that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering internal control over financial reporting and compliance. The paragraph will also state that the report is not suitable for any other purpose. If during our audit we become aware that the School is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with U.S. generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements. Management Responsibilities Management is responsible for the basic financial statements and all accompanying information as well as all representations contained therein. As part of the audit, we will assist with preparation of your financial statements and related notes. You will be required to acknowledge in the written representation letter our assistance with preparation of the financial statements and that you have reviewed and approved the financial statements and related notes prior to their issuance and have accepted responsibility for them. Further, you agree to assume all management responsibilities for any nonaudit services we provide; oversee the services by designating an individual, preferably from senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services; and accept responsibility for them. Management is responsible for establishing and maintaining effective internal controls, including evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; for the selection and application of accounting principles; and for the preparation and fair presentation of the financial statements in conformity with U.S. generally accepted accounting principles. Management is also responsible for making all financial records and related information available to us and for ensuring that management is reliable and financial information is reliable and properly recorded. You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, (2) additional information that we may request for the purpose of the audit, and (3) unrestricted access to persons within the government from whom we determine it necessary to obtain audit evidence. Your responsibilities 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 government involving (1) 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 government received in communications from employees, former employees, grantors, regulators, or others. 2 In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws, regulations, contracts, agreements, and grants for taking timely and appropriate steps to remedy any fraud, violations of contracts or grant agreements, or abuse that we may report. You are responsible for the preparation of the supplementary information in conformity with U.S. generally accepted accounting principles. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon or make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon. Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the supplementary information in accordance with GAAP; (2) that you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) that 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. 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 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 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. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, you understand that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by 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 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 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 may exist and not be detected by us, even though the audit is properly planned and performed in accordance with U.S. generally accepted auditing standards 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. 3 However, we will inform the appropriate level of management of any material errors, any fraudulent financial reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to 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 Control 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. 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 management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. 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 School's compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. However, the objective of our audit 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. Engagement Administration, Fees, and Other We understand that your employees will prepare all cash or other confirmations we request and will locate any documents selected by us for testing. We will provide copies of our reports to The School; however, management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. The audit documentation for this engagement is the property of Alberni, Caballero & Fierman, LLP 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 regulating authority or its designee, a 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 Alberni, Caballero & Fierman, LLP personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. 4 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 date or for any additional period requested by a regulating authority. If we are aware that a federal awarding agency 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. Andrew S. Fierman, CPA 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 $11,000 for the fiscal year ended June 30, 2016 (not including the Federal Single Audit, if required. See below). 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. The fees for subsequent years will be based on increases as delineated in the separate agreement between The City and Alberni Caballero& Fierman, LLP. If the School is required to undergo a single audit in accordance with the Federal Single Audit Act and OMB Circular A-133, Audits of States, Local Governments, and Not-for-Profit Organizations, we will discuss the fee at that time. Also, a new engagement letter will be provided that meets the requirements of the Federal Single Audit Act and OMB Circular A-133. The fee will be based the number of major programs to be tested and 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 addressed in 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. Our audit engagement ends on delivery of our audit report. Any follow-up services that might be required will be a separate, new engagement. The terms and conditions of that new engagement will be governed by a new, specific engagement letter for that service. Parties to this engagement agree that any dispute that may arise regarding the meaning, performance, or enforcement of this engagement will be submitted to mediation upon written request of any party to the engagement. The party requesting mediation shall select the mediation provider from the list of mediation training providers approved by the Florida Supreme Court. The mediation shall be conducted in accordance with the Commercial Mediation Rules of the American Arbitration Association or such other rules as may be agreed upon by the parties. The results of this mediation shall not be binding upon either party. Costs of any mediation proceeding shall be shared equally by both parties. The venue for any legal proceedings shall be Miami-Dade County, Florida, and this agreement shall be governed by the laws of the State of Florida. Our audit is intended for the benefit of The School. The audit will not be planned or conducted in contemplation of reliance by any third party or with respect to any specific transaction. Therefore, items of possible interest to a third party will not be specifically addressed and matters may exist that would be assessed differently by a third party, possibly in connection with a specific transaction. 5 If you intend to publish or otherwise reproduce the financial statements together with our report (or otherwise make reference to our Firm) in a document that contains other information, you agree to provide us with a draft of the document to read and comment on before it is printed and distributed. Furthermore, you agree that the terms of this engagement do not encompass an undertaking by us (1) to consent, by means of separate letter or otherwise, to the inclusion of our auditor's report on the financial statements referred to above in a filing with a Federal or state regulatory agency or otherwise reissue our report for purposes of a securities offering or other financing transaction, or (2) to acknowledge reliance on our report by others. We appreciate the opportunity to be of service to City of Aventura, Florida 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, (44.0.1,0 Andrew S. Fierman, CPA Partner Alberni, Caballero& Fierman, LLP RESPONSE: This letter correctly sets forth the understanding of he City of Avenura. Authorized signature: _ Title: G I.T cS- —/f�f�- Date: -6 tr— ..!z/1 6