Alberni Caballero & Fierman, LLP

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I I City of Sunny IslesBeach _ 111111111111111111111111111111111111111111111111IIIlii111111111111111111111111111111111111111111111111111111111I Iorganization is critical in planning our audit procedures and standards for testing and reporting on compliance with laws providing useful comments and recommendations to the and regulations. In all financial statement audits,the auditor I City. We utilize a standardized control overview document must consider laws and regulations that have a direct and which assists us in identifying key elements within internal material effect on the financial statements. Further,the control,such as the entity's risk assessment process,the auditor designs audit procedures to provide reasonable control environment,information and communication assurance that the financial statements are free of material I systems,and general monitoring and control activities. misstatements resulting from violations of these laws and Our evaluation of internal control includes considering the regulations that have a direct and material impact on individual components noted above and then considering the the financial statements. For governmental entities,this I effectiveness of internal control as a whole. We will obtain requirement is even more important given the variety our understanding of each of the elements through the of legal and contractual considerations typical of the following procedures: government environment. Identifying applicable laws and regulations is fundamental I • Meeting with the City's personnel to discuss operations;and to fulfilling the responsibility of understanding their effects. We will obtain this knowledge through the following sources: • Reviewing internal assessment of internal control • Discussion of compliance requirements with The control overview document helps to ensure that all the City's officials, including legal counsel. elements of internal control are considered. • Identification of compliance matters in statutes, financial ordinances,the City's policies,contracts, I Subsequently, (or significant internal control categories,we grana and debt agreements. will obtain an understanding of the design of relevant policies • Review of the City's commission meeting minutes. and procedures,determine whether such procedures have been placed in operation and assess control risk. This re- • Inquiries of the program administrator of the I view begins by holding interviews with data processing and governmental entities that provided grants about accounting personnel and evaluating your internal system restrictions,limitations,terms and conditions under and accounting documentation. We will then prepare which such grants were provided including review of the I documentation of the major systems. To the extent it is OMB Circular A-133 Compliance Supplement and the available;we will also use internal control documentation Florida Single Audit Act. currently available. This review is organized into major • Our existing knowledge of federal and state laws. accounting cycles. IWe have found through our experience that there are two Statistical Samples Offered To Be Performed In primary methods to test controls. The Audit Based On Federal Grant Funds Awarded To The City • Documented controls—Tested by reviewing a sample During the planning of the Single Audit engagement of transactions for evidence that the control was (if required in any year),we will identify the major programs being performed. to be audited pursuant to Circular OMB A-133. As required, I • Undocumented controls—Tested through inquiry and observation procedures with appropriate the determination will be based on the dollar amount of federal expenditures and the associated program risk. department personnel. Further,as appropriate,our audit will be planned to Laws and Regulations provide for a low level of assessed control risk. I Statement on Auditing Standards from the American • After we have identified the major programs,we will Institute of Certified Public Accountants,establishes perform appropriate auditing procedures, including tests of controls, tests of compliance with laws and I1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 Proposal for Professional Auditing Services I Alberni Caballero&Fierman,LLP page 21 I