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<br />SECTION 1.5(C) TECHNICAL PROPOSAL <br /> <br />8: SPECIFIC AUDIT APPROACH (Continued) <br /> <br />Proposed segmentation of the engagement (Continued) <br /> <br />Phase III - Completion and Deliverv (Continued) <br /> <br />· Management consultation with other accountants; <br />· Major issues discussed with management prior to retention; and <br />· Difficulties encountered in performing the audit. <br /> <br />Any criticism of operations will be constructive, and whenever recommendations have been <br />already identified by internal staff, the letter will so state. Our findings will contain a statement of <br />condition describing the situation and the area that needs strengthening, what should be <br />corrected and why. Our suggestions will withstand the basic tests of corrective action: <br /> <br />· The recommendation must be cost effective; <br />· The recommendations are to be the simplest to effectuate in order to correct a problem; <br />· The recommendation must go to the heart of the problem and not just correct <br />symptomatic matter; and <br />· The corrective action must take into account why the deficiency occurred. <br /> <br />We wish to assist you in identifying and solving problems before they become critical. Our <br />personnel's diverse experience, and their independent and objective views, ensures valuable and <br />meaningful comments, observations, and conclusions as presented in our management letters. <br /> <br />b. Level of Staff to be assigned <br /> <br />Level of staff to be assigned and estimated number of hours to be assigned to each proposed <br />segment. <br /> <br />CAFR ONLY <br /> <br /> Partner Manager Senior Staff Total <br />Preliminary Planninq 10 10 10 30 <br />Perform Audit Plan 30 60 40 130 <br />Completion and Delivery 20 20 10 50 <br /> 30 60 80 40 210 <br /> <br />c. Sample size and the extent to which statistical sampling is to be used in the <br />engagement <br /> <br />Our professionals will utilize sampling methodologies designed to ensure effective audit <br />procedures are applied in the most efficient manner. <br /> <br />Samolina Techniaues <br />We will utilize representative audit sampling procedures with respect to tests of transactions and <br />tests of controls, where a sample of documentation is to be tested as the principal evidence of a <br />control. During tests of controls, the tests will generally consist of a combination of corroborative <br />inquiry and either observation, examination of documents or re-performance. We will use <br />attribute sampling to test documentary evidence as documentation will be the prime corroborative <br />evidence of identified controls. <br /> <br />'rr;~r?e~if~d ~~~~~~~,~~~ <br /> <br />12 <br />