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. I I I I I :1 I, I I II I II I II I. II 'I I. I r n ~ Gerstle, Rosen & Goldenberg, P.A. \.:::;. "'\.\"J Certified Public Accountants assist in determining that the financial statements are free of material errors or violations of compliances imposed on the City. The auditor will obtain the data from various sources including entrance conferences with City officials and management; reviews of contracts, awards, grants and ordinances; and other available data. h. Drawing Audit Samples For Tests of Compliance The extent of compliance testing is dependent, to a large extent, on the City's controls over compliance that include policies and procedures that the City has implemented to provide reasonable assurance that program implementation is in accordance with laws, regulations, and provisions of contracts or grant agreements. The approach in drawing audit samples for purposes of tests of compliance will be based on the results of GRG's analytical procedures, evaluation of internal control and assessment results. Based on GRG's review of the City's systems of internal control, the extent of compliance testing will be developed in accordance with the above factors and GAGAS guidelines. i. GFOA Requirements for Certificate of Excellence in Financial Reporting GRG understands the importance to the City for recognition by the Government Finance Officers Association (GFOA) in receiving the Certificate of Achievement for Excellence in Financial Reporting award for preparing comprehensive annual financial reports (CAFRs). In this regard, GRG will use its expertise to participate with the City in developing and preparing its CAFR submission in accordance with GASB pronouncements and the GFOA checklist. j. Management Letter GRG develops its management letters by discussing each comment with responsible members of management before developing its management letter. Since the auditor is independent and not involved with the client management on a daily basis to fully understand management priorities, political conditions or technical aspects of the City's operations, interaction with the City's management is most necessary to determine the significance or impact of the auditor's comments. GRG believes that politically insensitive advisory comments in a management letter can sour the client/auditor relationship. The firm recognizes that both the client and the auditor sacrifice a fair hearing and even lose the client's goodwill by ignoring the political context of the auditor's recommendations. The AICPA ethics standards preclude the dissemination of clients' management letters to third parties. Discussed above, is GRG's approach toward the preparation of management letters and the consideration given to the client's comments, thereon. k. Quality Control Procedures and Review GRG believes that their internal review and control procedures are paramount for achieving high quality control standards for the success of an engagement to its clients as well as to the firm. Through appropriate monitoring of the engagement, proper engagement staffing, and continuous staff training, the firm has the capacity to deliver high quality, accurate and timely reports to its clients. In order for our professional staff 9