ITEM 3.11 Financial Audit ServicesASK
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MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT ` REQUESTOR:
MEETING DATE:
Administration City Administrator/Finance Director Flaherty
December 9, 2019
PRESENTER(s) REVIEWED BY:
ITEM #:
Consent
3.11
STRATEGIC VISION
MEETS:
THE CITY OF OTSEGO:
X
Is a strong organization that is committed to leading the community through innovative
communication.
IS A PUBLIC HEARING REQUIRED?
Has proactively expanded infrastructure to responsibly provide core services.
No
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
In accordance with Minnesota Statutes, the financial statements within the City's CAFR must be audited on
Is a social community with diverse housing, service options, and employment opportunities.
The previous engagement letter outlined that BerganKDV would perform the independent financial
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council approve an engagement letter for financial statement
audit services.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No
No
BACKGROUND/J USTI F I CATI O N:
In accordance with Minnesota Statutes, the financial statements within the City's CAFR must be audited on
an annual basis. Since the 2013 audit, the City's audit has been completed by BerganKDV.
The previous engagement letter outlined that BerganKDV would perform the independent financial
statement auditing services through the 2018 audit. Upon completion of said audit, City staff obtained a
quote for an additional three years of services. The quote outlined the following fee schedule:
- 2019 $29,000 2.47%
- 2020 $29,725 2.50%
- 2021 $30,450 2.44%
This quote was reviewed by the City Council at the June 10, 2019 special Council meeting, with the City
Council concurring with the quote as presented.
City staff has been pleased thus far in working with BerganKDV during the audit process. Staff believes that
the audit team assigned to Otsego has been well qualified as well as being easy to work with. City staff
recommends entering into a three-year engagement agreement with BerganKDV.
SUPPORTING DOCUMENTS ATTACHED:
0 Audit Engagement Agreement
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE ITTO APPEAR IN THE MINUTES:
Motion to authorize the City Administrator/Finance Director to sign a three year engagement letter with
BerganKDV for audit services for the years ending December 31, 2019, 2020 and 2021.
BUDGET INFORMATION
FUNDING: '
BUDGETED:
General Fund — Finance Department
101-41600-304
Yes
berganKDV
Sent via electronic mail to:
November 27, 2019
City of Otsego
Mr. Adam Flaherty
13400 90th Street NE
Otsego, MN 55330
Dear Mr. Flaherty:
This letter is to confirm and summarize our understanding of the terms and objectives of our engagement and the nature and
limitations of the services we will provide.
Summary of Engagement Terms:
Level of Attest Service: Audit in accordance with Governmental Auditing Standards (Governmental)
Financial Statements: Governmental activities, the business -type activities, each major fund, and the aggregate remaining
fund information
Financial Reporting Framework: Accounting Principles Generally Accepted in the United States of America
Period: As of and for the Year Ended December 31, 2019, 2020 and 2021
Required Supplementary Information: Management's Discussion and Analysis (MD&A), Schedule of City's and Non -
employer's Proportionate Share of Net Pension Liability - Minnesota PERA Plans, Schedule of City Contributions -
Minnesota PERA Plans
Supplementary Information:
• Combining and Individual Fund Financial Statements and Schedules/Supplemental Schedules: Opinion in relation
to the financial statements as a whole
• Introductory Section and Statistical Section of the Comprehensive Annual Financial Report: Introductory Section
and Statistical Section of the Comprehensive Annual Financial Report - No opinion or assurance
Engagement Partner: Nancy Schulzetenberg
Fees: Our fees for these services will be 2019 -$29,000, 2020 - $29,725, 2021- $30,450 for the audit.
Non -attest Services: Preparation of the financial statements
We appreciate the opportunity to be of service to you and believe this letter and attached audit engagement agreement
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 and as further detailed in the attached audit engagement
agreement, please acknowledge your acceptance by signing and returning it to us.
I have read and I agree to the summary of engagement terms listed above and the terms in the attached audit engagement
agreement.
Sincerely,
Nancy Schulzetenberg, Certified Public Accountant
BerganKDV
Acknowledged by:
Title:
PROFESSIONAL SERVICES THE MIDWEST WAY
BerganKDV, Ltd. I bergankftcom I infogbergankdv.com G]
AUDIT ENGAGEMENT AGREEMENT I Governmental — Yellow Book Audit
This agreement is to confirm our understanding of the terms and objectives of our engagement and the nature and limitations
of the services we are to provide.
We will audit the financial statements as identified in the summary of engagement terms, including the related notes to the
financial statements, which collectively comprise the basic financial statements of the governmental entity. 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 governmental entity'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
governmental entity'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 preparingthe 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 required RSI is identified in the summary of engagement terms and will be subjected to certain
limited procedures but will not be audited.
We may also be engaged to report on supplementary information other than RSI that accompanies the governmental entity's
financial statements. If we opine on the supplementary information, accompanying the financial statements as identified in
the summary of engagement terms, we will subject the 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 we will provide an opinion on it in relation to the financial statements as a whole.
If we do not provide an opinion or any assurance on the supplementary information otherthan RSI as identified in the summary
of engagement terms, the other information accompanying the financial statements will not be subjected to the auditing
procedures applied in ouraudit of the financial statements and our auditor's reportwill not provide an opinion orany assurance
on that other information.
AUDIT OBJECTIVES
The objective of our audit is the expression of opinions as to whether your financial statements are fairly presented, in all
material respects, in conformity with the financial reporting framework identified in the summary of engagement terms and
to report on the fairness of the supplementary information for which we opine on as identified in the summary of engagement
terms 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 governmental entity and other procedures we consider necessary to enable us to express such
opinions. We will issue a written report upon completion of our audit of the governmental entity's financial statements. We
cannot provide assurance that unmodified opinions will be expressed, Circumstances may arise in which it is necessary for us
to modify our opinions or add emphasis -of -matter or other -matter paragraphs. If our opinions 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 issue reports, or may withdraw from 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 report on internal control and
on compliance and other matters will include a paragraph that states (1) that the purpose of the report is solely to describe
the scope of testing of internal control and compliance, and the results of that testing, and not to provide an opinion on the
effectiveness of the entity's internal control on compliance, and (2) that the report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the entity's internal control and compliance. The paragraph
will also state that the report is not suitable for any other purpose. If during our audit we become aware that the governmental
entity 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 auditing standards generally accepted in
the United States of America and the standards forfinancial audits contained in Government Auditing Standards may not satisfy
the relevant legal, regulatory, or contractual requirements.
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AUDIT ENGAGEMENT AGREEMENT I Governmental —Yellow Book Audit
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 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 government or to acts by management or employees acting on behalf of
the government. 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 auditing standards generally accepted in
the United States of American 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, fraudulent financial
reporting, or misappropriation of assets that comes to our attention. We will also inform the appropriate level of management
of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential, and of any
material abuse that comes to our attention. 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 may request
written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry.
At the conclusion of our audit, we will require certain written representations from you about your responsibilities for the
financial statements; compliance with laws, regulations, contracts, and grant agreements; and other responsibilities required
by auditing standards generally accepted in the United States of America.
AUDIT PROCEDURES — INTERNAL CONTROL
Our audit will include obtaining an understanding of the government 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 governmental entity'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.
OTHER SERVICES
We will also assist in preparing the financial statements and related notes of the governmental entity in conformity with the
financial reporting framework identified in the summary of engagement terms based on information provided by you. These
non -attest services do not constitute an audit under Government Auditing Standards and such services will not be conducted
in accordance with Government Auditing Standards.
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AUDIT ENGAGEMENT AGREEMENT I Governmental — Yellow Book Audit
We may provide other non -attest services, as identified in the summary of engagement terms. These services may not be fully
covered under this engagement agreement and may be billed separately under other agreements with you.
We will perform the services in accordance with applicable professional standards. We, in our sole professional judgment,
reserve the right to refuse to perform any procedure or take any action that could be construed as assuming management
responsibilities.
MANAGEMENT RESPONSIBILITIES
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; following laws and regulations; and ensuring
that management and financial information is reliable and properly reported. Management is also responsible for
implementing systems designed to achieve compliance with applicable laws, regulations, contracts, and grant agreements. You
are also responsible for the selection and application of accounting principles, for the preparation and fair presentation of the
financial statements and all accompanying information in conformity with the financial reporting framework identified in the
summary of engagement terms, 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 the accuracy
and completeness of that information. You are also responsible for providing us with (1) access to all information of which you
are aware that is relevant to the preparation and fair presentation of the financial statements, (2) additional information that
we may request for the purpose of the audit, and (3) unrestricted access to persons within the government from whom we
determine it necessary to obtain audit evidence.
Your responsibilities 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 as a whole.
You are responsible forthe design and implementation of programs and controls to prevent and detectfraud, 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 government complies with applicable laws, regulations, contracts,
agreements, and grants and for taking timely and appropriate steps to remedy fraud and noncompliance with provisions of
laws, regulations, contracts or grant agreements, or abuse that we report.
You are responsible for the preparation of the supplementary information, which we have been engaged to report on, in
conformity with the financial reporting framework identified in the summary of engagement terms. 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. 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 the
financial reporting framework identified in the summary of engagement terms; (2) you believe the supplementary information,
including its form and content, is fairly presented in accordance with the financial reporting framework identified in the
summary of engagement terms; (3) the methods of measurement or presentation have not changed from those used in the
prior period; 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 and providing report copies of previous financial audits,
attestation engagements, performance audits or other studies related to the objectives discussed in the Audit Objectives
section of this agreement. 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.
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AUDIT ENGAGEMENT AGREEMENT I Governmental — Yellow Book Audit
You agree to assume all management responsibilities for the non -attest services identified in the summary of engagement
terms and any other non -attest services we provide. You will be required to acknowledge in the management representation
letter our assistance with preparation of the financial statements and related notes and that you have reviewed and approved
the financial statements and related notes priorto their issuance and have accepted responsibility forthem. Further, you agree
to oversee the non -attest services by designating an individual, preferably from senior management, with suitable skill,
knowledge, or experience; evaluate the adequacy and results of those services; and accept responsibility for them.
THIRD -PARTY SERVICE PROVIDERS
We may from time to time, and depending on the circumstances, use third -party service providers in servingyour account. We
may share confidential information about you with these service providers, but remain committed to maintaining the
confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to
protect the confidentiality of your personal information. In addition, we will secure confidentiality agreements with all service
providers to maintain the confidentiality of your information and we will take reasonable precautions to determine that they
have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the
event that we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior
to the sharing of your confidential information with the third -party service provider. Furthermore, we will remain responsible
for the work provided by any such third -party service providers.
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.
We will provide copies of our reports to the governmental entity; 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 forthis engagement is the property of BerganKDV and constitutes confidential information. However,
subject to applicable laws and regulations, audit documentation and appropriate individuals will be made available upon
request and in a timely manner to oversight, regulatory, state agencies or their designees pursuant to authority given to them
by law or regulation, 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 BerganKDV
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 the oversight, regulatory or state agencies. 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.
The engagement partner, as identified in the summary of engagement terms, is responsible for supervising the engagement
and signing the reports or authorizing another individual to sign them.
Our fees for these services are detailed in the summary of engagement terms. The fee estimate is based on anticipated
cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the
engagement. If significant additional time is necessary, we will keep you informed of any problems we encounter and our fees
will be adjusted accordingly. 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 60 days or more overdue
and will 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.
You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket expenditures through
the date of termination. A service charge of 1% per month, which is an annual rate of 12%, will be added to all accounts unpaid
30 days after billing date. If collection action is necessary, expenses and reasonable attorney's fees will be added to the a mount
due.
You may request that we perform additional services not contemplated by this engagement agreement or summary of
engagement terms. If this occurs, we will communicate with you regarding the scope of the additional services and the
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AUDIT ENGAGEMENT AGREEMENT I Governmental —Yellow Book Audit
estimated fee. We also may issue a separate engagement agreement and summary of engagement terms 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 agreement and summary of engagement terms.
During the course of our engagement, we may accumulate records containing data which should be reflected in your books
and records. You will determine that all such data will be so reflected. Accordingly, you will not expect us to maintain copies of
such records in our possession.
This engagement agreement and summary of engagement terms includes your authorization for us to supply you with
electronically formatted financial statements or drafts of financial statements, financially sensitive information, spreadsheets,
trial balances or other financial data from our files, upon your request.
If you intend to publish or otherwise reproduce the financial statements and make reference to our Firm name, you agree to
provide us with printers' proofs or masters for our review and approval before printing. You also agree to provide us with a
copy of the final reproduced material for our approval before it is distributed. Additionally, if you include our report or a
reference to our Firm name in an electronic format, you agree to provide the complete electronic communication using or
referring to our name to us for our review and approval prior to distribution.
During the course of our engagement, we will request information and explanations from management regarding the entity's
operations, internal controls, future plans, specific transactions, and accounting systems and procedures. At the conclusion of
our engagement, we will require, as a precondition to the issuance of our report, that management provide certain
representations in a written representation letter. The procedures we will perform in our engagement and the conclusions we
reach as a basis for our report will be heavily influenced by the written and oral representations that we receive from
management. Accordingly, false representations could cause us to expend unnecessary efforts or could cause a material error
or a fraud to go undetected by our procedures. In view of the foregoing, you agree that we shall not be responsible for any
misstatements in the entity's financial statements that we may fail to detect as a result of false or misleading representations
that are made to us by management.
Any disputes between us that arise under this agreement, or for a breach of this agreement, or that arise out of any other
services performed by us for you, must be submitted to nonbinding mediation before either of us can start a lawsuit against
the other. To conduct mediation, each of us shall designate a representative with authority to fully resolve any and all disputes,
and those representatives shall meet and attempt to negotiate a resolution of the dispute. If that effort fails, then a competent
and impartial third party acceptable to each side shall be appointed to hold and conduct a nonbinding mediation proceeding.
You and we will equally share in the expenses of the mediator and each of us will pay for our own attorneys' fees, if any. No
lawsuit or legal process shall be commenced until at least 60 days after the mediator's first meeting with the parties.
The nature of our engagement makes it inherently difficult, with the passage of time, to present evidence in a lawsuit that fully
and fairly establishes the facts underlying any dispute that may arise between us. We both agree that notwithstanding any
statute of limitation that might otherwise apply to a claim or dispute, including one arising out of this agreement or the services
performed under this agreement, or for breach of contract, fraud or misrepresentation, a lawsuit must be commenced within
24 months after the date of our report. This 24 -month period applies and starts to run on the date of each report, even if we
continue to perform services in later periods and even if you or we have not become aware of the existence of a claim or the
basis for a possible claim. In the event that a claim or dispute is not asserted at least 60 days before the expiration of this 24 -
month period, then the period of limitation shall be extended by 60 days, to allow the parties of conduct nonbinding mediation.
Our role is strictly limited to the engagement described in this agreement and summary of engagement terms, and we offer
no assurance as to the results or ultimate outcomes of this engagement or of any decisions that you may make based upon
our communications with, or our reports to you. Your entity will be solely responsible for making all decisions concerning the
contents of our communications and reports, for the adoption of any plans and for implementing any plans you may develop,
including any that we may discuss with you.
You agree that it is appropriate to limit the liability of BerganKDV, its shareholders, directors, officers, employees and agents
and that this limitation of remedies provision is governed by the laws of Minnesota, without giving effect to choice of law
principles.
You further agree that you will not hold us liable for any claim, cost or damage, whether based on warranty, tort, contract or
other law, arising from or related to this agreement, the services provided under this agreement, the work product, or for any
plans, actions or results of this engagement, except to the extent authorized by this agreement. In no event shall we be liable
to you for any indirect, special, incidental, consequential, punitive or exemplary damages, or for loss of profits or loss of
goodwill, costs or attorney's fees.
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The exclusive remedy available to you shall be the right to pursue claims for actual damages that are directly caused by acts or
omissions that are breaches by us of our duties under this agreement.
SEVERABILITY
If any portion of this engagement agreement and summary of engagement terms is held to be void, invalid, or otherwise
unenforceable in whole or in part, for any reason whatsoever, such portion of this engagement agreement and summary of
engagement terms shall be amended to the minimum extent required to make the provision enforceable and the remaining
portions of the engagement agreement and summary of engagement terms shall remain in full force and effect.
POWER AND AUTHORITY
Each of the parties hereto has all requisite power and authority to execute and deliver this engagement agreement and
summary of engagement terms and to carry out and perform its respective obligations hereunder. This agreement constitutes
the legal, valid and binding obligations of each party, enforceable against such party in accordance with its terms.
PEER REVIEW REPORT
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 contract.
Our 2017 peer review report is attached as follows,
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��
BMGCERTIFIED P
ACCOUNTANTS,UBLIC LLP
Report on the Firm's System of Quality Control
October 16, 2017
To the Partners of BerganKDV, Ltd.
and the Peer Review Committee of the Minnesota Society of CPAs
We have reviewed the system of quality control for the accounting and auditing practice of
BerganKDV, Ltd. (the firm) in effect for the year ended March 31, 2017. 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
(Standards).
A summary of the nature, objectives, scope, limitations of, and the procedures performed in a
System Review as described in the Standards may be found at www.aicpa.orcl(prsummary. The
summary also includes an explanation of how engagements identified as not performed or
reported in conformity with applicable professional standards, if any, are evaluated by a peer
reviewer to determine a peer review rating.
Firm's Responsibility
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. The firm is also responsible for evaluating actions
to promptly remediate engagements deemed as not performed or reported in conformity with
professional standards, when appropriate, and for remediating weaknesses in its system of quality
control, if any.
Peer Reviewer's Responsibility
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.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing
Standards, including compliance audits under the Single Audit Act and audits of employee benefit
plans,
As a part of our peer review, we considered reviews by regulatory entities as communicated by
the firm, if applicable, in determining the nature and extent of our procedures.
211 S. 84th Street Phone: 402.483.7781
Lincoln, NE 68510 Fax: 402.483,5198
www.bmgcpas.com Email:lnfo@bmgcpas.com
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Opinion
In our opinion, the system of quality control for the accounting and auditing practice of
BerganKDV, Ltd. in effect for the year ended March 31, 2017, 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. BerganKDV, Ltd. has received a peer review rating
of pass.
BMG Certified Public Accountants, LLP
C-�
Lincoln, Nebraska
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