R2005-48 ACCEPTING THE PROPROSAL AND AUTHORIZING AN ENGAGEMENT CONTRACT

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Honorable Mayor and City Council City of Decatur, Illinois Page 4 April 20, 2005 or suspected fraud affecting the City received in communications from employees, former emp��yees, regulators, or others. While an audit includes obtaining an understanding of internal control sufficient to plan the audit and to determine the nature, timing, and extent of audit procedures to be perFormed, it is not designed to provide assurance on internal control or to identify reportable conditions. However, we will inform you of any reportable conditions that come to our attention. Our relationship with you is limited to that described in this letter. As such, you understand and agree that we are acting solely as independent accountants. We are not acting in any way as a fiduciary or assuming any fiduciary responsibilities for you. Your personnel will provide us with the necessary detailed trial balances and supporting schedules. We expect that your office personnel will help us by locating and submitting to us invoices, vouchers, canceled checks and other documents and records that we request. You will disclose any significant vendor relationships where the vendor transaction is structured such that the vendor is responsible for program compliance under OMB Circular A-133. We wish to emphasize that management has the responsibility for the proper recording of transactions, for the safeguarding of assets, for compliance with all applicable laws and regulations and the provisions of contracts and grant agreements and for the substantial accuracy of the financial statements and the schedule of expenditures of federal awards. Management is responsible for adjusting the financial statements to correct material misstatements and for affirming 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 opinion units in the financial statements. Management's responsibility includes establishing and maintaining internal control over financial reporting and compliance and retaining, supervising and training qualified personnel in areas affecting financial matters. Management is also responsible for making all financial records and related information available to us. Although our firm may prepare or help in preparing your financial statements and the schedule of expenditures of federal awards, the statements and the schedule of expenditures of federal awards are the representations of management. Management is also responsible for submitting the reporting package and for following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior audit findings and a corrective action plan. As part of this responsibility, you agree to provide us, before the delivery date of the financial statements, with written confirmation of the representations made to us by you and your staff during the course of our engagement. You agree t� authorize your predecessor accountant/auditor to respond fully to any inquiries we may find necessary. If we find it necessary, you will authorize such predecessor to allow us to review their working papers. You will be responsible for any fees billed by the predecessor accountanUauditor for time or expenses in connection with our firm reviewing the prior year's audit workpapers and related inquiries of the predecessor.