HomeMy WebLinkAboutGE19-001 McMahan and AssociatesMcMahan and Associates, l.l.c.
Certified Public Accountants and Consultants
Web Site: www.mcmahancpa.com
Chapel Square, Bldg C Main Office: (970) 845-8800
245 Chapel Place, Suite 300 Facsimile: (970) 845-8108
P.O. Box 5850 Avon, CO 81620 E-mail: mcmahan@mcmahancpa.com
Member: American Institute of Certified Public Accountants
Paul J. Backes, CPA, CGMA Avon: (970) 845-8800
Michael N. Jenkins, CA, CPA, CGMA Aspen: (970) 544-3996
Daniel R. Cudahy, CPA, CGMA Frisco: (970) 668-3481
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December 13, 2018
Board of Directors
Golden Eagle Elderly Housing Corporation
c/o Eagle County
P.O. Box 850
Eagle, Colorado 81631-0850
Attention: Jill Klosterman, Finance Director
Dear Board members:
We are pleased to confirm our understanding of the services we are to provide for Golden Eagle Elderly
Housing Corporation (“Corporation”); a component unit of Eagle County, Colorado, for the year ending
December 31, 2018.
We will audit the financial statements of the Corporation, which comprise the statement of financial
position as of December 31, 2018, and the related statements of activities and cash flows for the year
then ending, and the related notes to the financial statements. Also, the following supplementary
information accompanying the financial statements will be subjected to the auditing procedures applied in
our audit of the financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America, and our auditor’s
report will provide an opinion on it in relation to the financial statements as a whole:
1) Schedule of Change in Net Assets – Budget and Actual – 2018
2) Schedule of Additional Disclosures – Management Fee Calculation
3) Schedule of Additional Disclosures – Insurance Disclosure
Audit Objective
The objective of our audit is the expression of an opinion about whether the Corporation’s financial
statements are fairly presented, in all material respects, in conformity with accounting principles generally
accepted in the United States of America and to report on the fairness of the supplementary information
referred to above when considered in relation to the financial statements as a whole. Our audit will be
conducted in accordance with auditing standards generally accepted in the United States of America and
will include tests of your accounting records and other procedures we consider necessary to enable us to
express such an opinion. We cannot provide assurance that an unmodified opinion will be expressed.
Circumstances may arise in which it is necessary for us to modify our opinion or add emphasis-of-matter
or other-matter paragraphs. If our opinion is other than unmodified, we will 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.
DocuSign Envelope ID: E315053B-D9B1-4264-B669-F718339CE9F5
Board of Directors
Golden Eagle Elderly Housing Corporation
December 13, 2018
Page 2
Audit Procedures
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, tests of the physical existence of inventories, and direct confirmation of receivables and certain
assets and liabilities by correspondence with selected individuals, funding sources, creditors, and
financial institutions. We will also 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
require certain written representations from you about the financial statements and related matters.
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. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements. 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) misappropriations of assets, or (4) violations of laws or governmental regulations that are attributable
to the Corporation or to acts by management or employees on behalf of the Corporation.
Because of the inherent limitations of an audit, combined with the inherent limitations of internal control,
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, even though the audit is properly planned and
performed in accordance with auditing standards generally accepted in the United States of America. 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 the appropriate level of management of any material errors, fraudulent financial
reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate
level of management 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 any later periods for which we are not engaged as auditors.
Our audit will include obtaining an understanding of the Corporation and its environment, including
internal control, sufficient to assess the risks of material misstatement of the financial statements and to
design the nature, timing, and extent of further audit procedures. An audit is not designed to provide
assurance on internal control or to identify deficiencies in internal control. However, during the audit, we
will communicate to you and those charged with governance internal control related matters that are
required to be communicated under professional standards.
Management Responsibilities
Management is responsible for the basic financial statements and all accompanying information as well
as all representations contained therein. As part of the audit, we will assist with preparation of the
Corporation’s financial statements and related notes. You will be required to acknowledge in the
representation letter our assistance with preparation of the financial statements and related notes and
that you have evaluated the adequacy of our services and have reviewed and approved the results of the
services, the financial statements and related notes prior to their issuance and have accepted
responsibility for them. Further, you are required to designate an individual, preferably from senior
management, with suitable skill, knowledge, or experience to oversee any non-audit services we provide
and for evaluating the adequacy and results of those services and accepting responsibility for them.
Management is responsible for establishing and maintaining effective internal controls, including
evaluating and monitoring ongoing activities. You are also responsible for the selection and application of
accounting principles; for the preparation and fair presentation of the financial statements in conformity
with accounting principles generally accepted in the United States of America; and for compliance with
applicable laws and regulations and the provisions of contracts and grant agreements.
DocuSign Envelope ID: E315053B-D9B1-4264-B669-F718339CE9F5
Board of Directors
Golden Eagle Elderly Housing Corporation
December 13, 2018
Page 3
Management Responsibilities (continued)
You are also responsible for providing us with (1) access to all information of which you are aware that is
relevant to the preparation and fair presentation of the financial statements, (2) additional information that
we may request for the purpose of the audit, and (3) unrestricted access to persons within the
organization from whom we determine it necessary to obtain audit evidence. Your responsibilities include
adjusting the financial statements to correct material misstatements and confirming to us in the
management 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 affecting the Corporation involving (1)
management, (2) employees who have significant roles in internal control, and (3) others where the fraud
could have a material effect on the financial statements. Your responsibilities include informing us of
knowledge of any allegations of fraud or suspected fraud affecting the Corporation received in
communications from employees, former employees, grantors, regulators, or others. In addition,
management is responsible for identifying and ensuring the Corporation complies with applicable laws
and regulations.
You are responsible for the preparation of the supplementary information in conformity with accounting
principles generally accepted in the United States of America. You agree to include our report on the
supplementary information in any document that contains, and indicates that we have reported on, the
supplementary information. You also agree to include the audited financial statements with any
presentation of the supplementary information that includes our report thereon. Your responsibilities
include acknowledging to us in the representation letter that (1) you are responsible for presentation of
the supplementary information in accordance with accounting principles generally accepted in the United
States of America; (2) that you believe the supplementary information, including its form and content, is
fairly presented in accordance with accounting principles generally accepted in the United States of
America; (3) that the methods of measurement or presentation have not changed from those used in the
prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us
any significant assumptions or interpretations underlying the measurement or presentation of the
supplementary information.
With regard to the electronic dissemination of audited financial statements, including financial statements
published electronically on your website, you understand that electronic sites are a means to distribute
information and, therefore, we are not required to read the information contained in these sites or to
consider the consistency of other information in the electronic site with the original document. With
regard to using the auditor’s report, you understand that you must obtain our prior written consent to
reproduce or use our report in bond offering official statements or other documents.
Audit Administration, Fees, and Other
We understand that your employees will prepare all cash, accounts receivable, and other confirmations,
reconciliations and work papers we request and will locate any documents selected by us for testing.
Michael Jenkins is the engagement partner and is responsible for supervising the engagement and
signing the report. Additional firm personnel will be assigned to the engagement as considered
necessary. We will schedule our audit fieldwork at a mutually convenient time.
DocuSign Envelope ID: E315053B-D9B1-4264-B669-F718339CE9F5
Board of Directors
Golden Eagle Elderly Housing Corporation
December 13, 2018
Page 4
Audit Administration, Fees, and Other
Our fees for these services will be based on our standard hourly rates, plus out-of-pocket costs (such as
report production, word processing, postage, travel, copies, telephone, etc.). Our standard hourly rates
vary according to the degree of responsibility involved and the experience level of the personnel assigned
to your audit. However, we estimate that our gross fee for the 2018 audit engagement will not exceed
$7,450. The fee estimate 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 keep you informed of any problems we encounter and our fees will be adjusted
accordingly.
Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation. In accordance with our firm policies, work may be suspended if your account becomes
overdue and may not be resumed until your account is paid in full. If we elect to terminate our services
for nonpayment, our engagement will be deemed to have been completed upon written notification of
termination, even if we have not completed our report. You will be obligated to compensate us for all time
expended and to reimburse us for all out-of-pocket costs through the date of termination.
We appreciate the opportunity to be of service to Golden Eagle Elderly Housing Corporation 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.
Very truly yours,
McMAHAN and ASSOCIATES, L.L.C.
This letter correctly sets forth the understanding of Golden Eagle Elderly Housing Corporation with
respect to the services to be performed by McMahan and Associates, L.L.C.
GOLDEN EAGLE ELDERLY HOUSING CORPORATION
BY:
Signature: _________________________________
Title: _________________________________
Date: _________________________________
DocuSign Envelope ID: E315053B-D9B1-4264-B669-F718339CE9F5
Kimberly Bell Williams
Secretary
1/3/2019
