06-112 - R TOWN OF PROSPER,TEXAS RESOLUTION NO. 06- 112
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF
PROSPER, TEXAS, HEREBY AUTHORIZING THE MAYOR OF THE
TOWN OF PROSPER, TEXAS, TO EXECUTE AN ENGAGEMENT
LETTER WITH PINGLETON, HOWARD, & COMPANY, P.C. FOR
AUDIT SERVICES.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN
OF PROSPER,TEXAS:
SECTION 1: The Mayor of the Town of Prosper,Texas, is hereby authorized to execute,
on behalf of the Town Council of the Town of Prosper, Texas, an engagement letter with
Pingleton, Howard, &Company, P.C.to provide audit services to the Town.
SECTION 2: This Resolution shall take effect immediately upon its passage.
RESOLVED THIS THE 24th day of October, 2006.
harles iswang ayor
ATTEST TO:
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atthew Denton, Town Secretary Ne.4. /`
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PINGLETON, HOWARD & COMPANY, P. C.
CERTIFIED PUBLIC ACCOUNTANTS
P. O. BOX 148
FRISCO, TEXAS 75034
972-335-9754/FAX 972-335-9758
TOM W.PINGLETON,CPA MEMBERS
RANDY HOWARD,CPA AMERICAN INSTITUTE OF CPAs
WHITNEY S.YOUNTS,CPA AICPA DIVISION FOR CPA FIRMS
WAYNE NABORS TEXAS SOCIETY OF CPAs
CINDY SCOTT
MARILYN BANDY
August 14, 2006
Mr. Doug Mousel
Town Administrator
Town of Prosper
P. O.Box 307
Prosper,Texas 75078
Dear Mr. Mousel:
We would like to be considered for providing audit services to the Town of Prosper, Texas. I have enclosed a
standard audit engagement letter and I am available,at your convenience,to discuss this letter. If you find the
letter to be in good order,please ask the Mayor to sign the letter and return it to us. We can arrange a date for
the audit fieldwork that is at your convenience.
Our proposed fee has not materially changed from the preceding year.
We appreciate the opportunity to be of service.
Sincerely,
(9`, \ ` O
Tom W. Pingleton,
TWP:mb
Enclosure
PINGLETON, HOWARD & COMPANY, P. C.
CERTIFIED PUBLIC ACCOUNTANTS
P. O. BOX 148
FRISCO, TEXAS 75034
972-335-9754/FAX 972-335-9758
TOM W.PINGLETON,CPA MEMBERS
RANDY HOWARD,CPA AMERICAN INSTITUTE OF CPAs
WHITNEY S.YOUNTS,CPA AICPA DIVISION FOR CPA FIRMS
WAYNE NABORS TEXAS SOCIETY OF CPAs
CINDY SCOTT
MARILYN BANDY
August 14, 2006
Town of Prosper
P. O. Box 307
Prosper, Texas 75078-0307
We are pleased to confirm our understanding of the services we are to provide Town of Prosper for the year
ended September 30,2006. We will audit the financial statements of the governmental activities,the business-
type activities, the aggregate discretely presented component units, each major fund, and the aggregate
remaining fund information, which collectively comprise the entity's basic financial statements, of Town of
Prosper as of and for the year ended September 30, 2006. The document we submit to you will include the
following supplementary information required by generally accepted accounting principles that will be subjected
to certain limited procedures,but will not be audited:
1. Management's Discussion and Analysis.
2. Individual Fund Statements.
Also,the document we submit to you will include the following additional information that will be subjected to
the auditing procedures applied in our audit of the financial statements upon which we will provide an opinion
in relation to the basic financial statements:
1. Supplemental Schedules.
Audit Objective
The objective of our audit is the expression of an opinion as to whether your financial statements are fairly
presented, in all material respects, in conformity with U. S. generally accepted accounting principles and to
report on the fairness of the additional information referred to in the first paragraph when considered in relation
to the financial statements taken as a whole. Our audit will be conducted in accordance with U. S. generally
accepted auditing standards and will include tests of the accounting records and other procedures we consider
necessary to enable us to express such an opinion. If our opinion on the financial statements is other than
unqualified,we will fully discuss the reasons with you in advance. If,for any reason,we are unable to complete
the audit or are unable to form or have not formed an opinion,we may decline to express an opinion or to issue
a report as a result of this engagement.
Town of Prosper
Page Two
Management Responsibility
Management is responsible for making all financial records and related information available to us. We
understand that you will provide us with such information required for our audit and that you are responsible
for the accuracy and completeness of that information. We will advise you about appropriate accounting
principles and their application and will assist in the preparation of your financial statements, but the
responsibility for the financial statements remains with you. You are responsible for making all management
decisions,performing all management functions,and designating a management-level employee with sufficient
skills, knowledge, or experience to oversee our financial statement preparation services and to evaluate the
adequacy and results of those services. As part of
our engagement,we may propose standard,adjusting,or correcting journal entries to your financial statements.
You are responsible for reviewing the entries and understanding the nature of any proposed entries and the
impact they have on the financial statements. That responsibility includes the establishment and maintenance
of adequate records and effective internal control over financial reporting, the selection and application of
accounting principles, and the safeguarding of assets. Management is responsible for adjusting the financial
statements to correct material misstatements and for confirming to us in the representation letter that the
effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the
latest period presented are immaterial,both individually and in the aggregate,to the financial statements taken
as a whole.
You are responsible for the design and implementation of programs and controls to prevent and detect fraud,
and for informing us about all known or suspected fraud or illegal acts affecting the government involving(1)
management, (2) employees who have significant roles in internal control, and (3) others where the fraud or
illegal acts could have a material effect on the financial statements. You are also responsible for informing us
of your knowledge of any allegations of fraud or suspected fraud or illegal acts affecting the government received
in communications from employees, former employees,regulators, or others. In addition,you are responsible
for identifying and ensuring that the entity complies with applicable laws and regulations and for taking timely
and appropriate steps to remedy any fraud,illegal acts,violations of contracts or grant agreements that we may
report.
Audit Procedures - General
An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial
statements;therefore,our audit will involve judgment about the number of transactions to be examined and the
areas to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance
about whether the financial statements are free of material misstatement, whether from (1) errors, (2)
fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental
regulations that are attributable to the entity or to acts by management or employees acting on behalf on the
entity. Because an audit is designed to provide reasonable,but not absolute,assurance and because we will not
perform a detailed examination of all transactions, there is a risk that material misstatements may exist and
not be detected by us. In addition, an audit is not designed to detect immaterial misstatements, or violations
of laws or governmental regulations that do not have a direct and material effect on the financial statements.
However, we will inform you of any material errors that come to our attention, and we will inform you of any
fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform you
of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential.
Our responsibility as auditors is limited to the period covered by our audit and does not extend to matters that
might arise during any later periods for which we are not engaged as auditors.
Town of Prosper
Page Three
Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts,
and may include tests of the physical existence of inventories,and direct confirmation of receivables and certain
other assets and liabilities by correspondence with selected individuals,creditors,and financial institutions. We
will request written representations from your attorneys as part of the engagement, and they may bill you for
responding to this inquiry. At the conclusion of our audit,we will also require certain written representations
from you about the financial statements and related matters.
Identifying and ensuring that Town of Prosper complies with laws,regulations,contracts,and agreements is the
responsibility of management. As part of obtaining reasonable assurance about whether the financial
statements are free of material misstatement, we will perform tests of Town of Prosper's compliance with
applicable laws and regulations and the provisions of contracts and agreements. However,the objective of our
audit will not be to provide an opinion on overall compliance and we will not express such an opinion.
Audit Procedures - Internal Controls
In planning and performing our audit,we will consider the internal control sufficient to plan the audit in order
to determine the nature,timing,and extent of our auditing procedures for the purpose of expressing our opinion
on Town of Prosper's financial statements.
An audit is not designed to provide assurance on internal control or to identify reportable conditions. However,
we will inform the governing body or audit committee of any matters involving internal control
and its operation that we consider to be reportable conditions under standards established by the American
Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating
to significant deficiencies in the design or operation of the internal control that,in our judgment,could adversely
affect the entity's ability to record,process,summarize,and report financial data consistent with the assertions
of management in the financial statements.
Audit Administration, Fees and Other
We expect to begin our audit on approximately November 13, 2006 and to issue our reports no later than
December 30, 2006.
Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report
reproduction,word processing,postage,travel,copies,telephone,etc.). We estimate that our total fees for this
audit will range from $21,000 to $23,000. Our standard hourly rates vary according to the degree of
responsibility involved and the experience level of the personnel assigned to your audit. A partial billing will
be rendered at the completion of fieldwork, and a final billing will be rendered at the time the reports are
delivered. Invoices are payable upon presentation. 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.
Town of Prosper
Page Four
We appreciate the opportunity to be of service to Town of Prosper 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.
Sincerely,
PINGLETON, HOWARD&COMPANY, P.C.
Tom W. Pingleton,
TWP:mb
RESPONSE:
This letter correctly sets forth the understanding of Town of Prosper.
By:
Title: / %1 4 A -
Date: lO f s/