HomeMy WebLinkAboutSOB22-01 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 16, 2021
Board of Directors
Seniors on Broadway LP
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 Seniors on Broadway
LP (the “Partnership”) for the year ending December 31, 2021. We will audit the financial statements of
the Partnership, which comprise the balance sheet as of December 31, 2021, and the related statements
of operations, changes in partners’ capital, and cash flows for the year then ended, and the related notes
to the financial statements.
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with auditing
standards generally accepted in the United States of America (“GAAS”) will always detect a material
misstatement when it exists. Misstatements, including omissions, can arise from fraud or error and are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the financial statements.
Auditor Responsibilities
We will conduct our audit in accordance with GAAS. As part of an audit in accordance with GAAS, we
exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. However, we will communicate to you
in writing concerning any significant deficiencies or material weaknesses in internal control
relevant to the audit of the financial statements that we have identified during the audit.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements, including the disclosures, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
DocuSign Envelope ID: 832DA929-58C3-4511-B91F-0F4A6ACBE5B6
Board of Directors
Seniors on Broadway LP
December 16, 2021
Page 2
Auditor Responsibilities (continued)
Conclude, based on the audit evidence obtained, whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Partnership’s ability to
continue as a going concern for a reasonable period of time.
Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an
unavoidable risk that some material misstatements may not be detected exists, even though the audit is
properly planned and performed in accordance with GAAS.
Our responsibility as auditors is limited to the period covered by our audit and does not extend to any
other periods.
As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of the Partnership’s compliance with certain provisions of laws,
regulations, contracts, and grants that could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those provisions is not
an objective of our audit, and accordingly, we will not express such an opinion.
Management Responsibilities
Our audit will be conducted on the basis that management acknowledge and understand that they have
responsibility.
a. For the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America (“GAAP”);
b. For the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether
due to error, fraudulent financial reporting, misappropriation of assets, or violations of laws,
governmental regulations, grant agreements, or contractual agreements;
c. To provide us with:
i. Access to all information of which management is aware that is relevant to the preparation
and fair presentation of the financial statements, such as records, documentation, and
other matters;
ii. Additional information that we may request from management for the purpose of the audit;
iii. Unrestricted access to persons within the entity from whom we determine it necessary to
obtain audit evidence;
d. For including the auditor’s report in any document containing financial statements that indicates
that such financial statements have been audited by us;
e. For identifying and ensuring that the entity complies with the laws and regulations applicable to its
activities;
f. For 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 current year under audit
are immaterial, both individually and in the aggregate, to the financial statements as a whole;
g. For acceptance of non-attest services, including identifying the proper party to oversee non-attest
work;
h. For maintaining adequate records, selecting and applying accounting principles, and
safeguarding assets;
i. For informing us of any known or suspected fraud affecting the entity involving management,
employees with significant role in internal control and others where fraud could have a material
effect on the financials; and
j. For the accuracy and completeness of all information provided.
As part of our audit process, we will request from management, written confirmation concerning
representations made to us in connection with the audit.
DocuSign Envelope ID: 832DA929-58C3-4511-B91F-0F4A6ACBE5B6
Board of Directors
Seniors on Broadway LP
December 16, 2021
Page 3
Nonattest Services
At the end of the year, we agree to perform the following:
Propose adjusting or correcting journal entries to be reviewed and approved by the Partnership’s
management.
Prepare federal and state income tax returns (Form 1065 and Colorado Form 106) for the
Partnership’s year ended December 31, 2021.
We will assist with the preparation of the Partnership’s financial statements, supplementary
financial information, and related notes, but the ultimate authority for review and preparation rests
with you.
We will not assume management responsibilities on behalf of the Partnership. However, we will provide
advice and recommendations to assist management of the Partnership in performing its responsibilities.
The Partnership’s management is responsible for (a) making all management decisions and performing
all management functions; (b) assigning a competent individual to oversee the services; (c) evaluating the
adequacy of the services performed; (d) evaluating and accepting responsibility for the results of the
services performed; and (e) establishing and maintaining internal controls, including monitoring ongoing
activities.
Our responsibilities and limitations of the non-attest services are as follows:
We will perform the services in accordance with applicable professional standards, including
FASB standards and the Statements on Standards for Tax Services issued by the AICPA.
The non-attest services are limited to the potential adjusting entries proposal, tax services, and
financial statement preparation as previously outlined. Our firm, in its sole professional judgment,
reserves the right to refuse to do any procedure or take any action that could be construed as
making management decisions or assuming management responsibilities, including determining
account coding and approving journal entries. Our firm will advise the Partnership with regard to
tax positions taken in the preparation of the tax return, but the Partnership must make all
decisions with regard to those matters.
Reporting
We will issue a written report upon completion of our audit of the Partnership’s basic financial statements.
Our report will be addressed to the Board of Directors. Circumstances may arise in which our report may
differ from its expected form and content based on the results of our audit. Depending on the nature of
these circumstances, it may be necessary for us to modify our opinion, add an emphasis-of-matter or
other-matter paragraph(s) to our auditor’s report, or if necessary, withdraw from the engagement.
Engagement Administration
We understand that your employees will prepare all confirmations we request and will locate any
documents or support for any other transactions we select for testing.
If you intend to publish or otherwise reproduce the financial statements and make reference to our firm,
you agree to provide us with printers’ proofs or masters for our review and approval before printing. You
also agree to provide us with a copy of the final reproduced material for our approval before it is
distributed.
During the course of the engagement, we may communicate with you or your personnel via fax or e-mail,
and you should be aware that communication in those mediums contains a risk of misdirected or
intercepted communications.
DocuSign Envelope ID: 832DA929-58C3-4511-B91F-0F4A6ACBE5B6
Board of Directors
Seniors on Broadway LP
December 16, 2021
Page 4
Engagement Administration (continued)
Regarding the electronic dissemination of audited financial statements, including financial statements
published electronically on your Internet 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.
Professional standards prohibit us from being the sole host and/or the sole storage for your financial and
non-financial data. As such, it is your responsibility to maintain your original data and records and we
cannot be responsible to maintain such original information. By signing this engagement letter, you affirm
that you have all the data and records required to make your books and records complete.
Michael Jenkins is the engagement partner for the services specified in this letter. His responsibilities
include supervising McMahan and Associates, L.L.C. services performed as part of this engagement and
signing or authorizing another qualified firm representative to sign the report(s) and returns.
Our fee for these services will be based on our standard hourly rates, plus out-of-pocket costs (such as
report reproduction, word processing, postage, travel, copies, telephone, etc.). Our standard hourly rates
vary according to degree of responsibility involved and experience level of the personnel assigned to your
audit. However, we estimate that our gross fee for the 2021 audit engagement will not exceed $7,500
and that our fee for the preparation of the Partnership’s 2021 tax returns will not exceed $1,250. This fee
estimate is based on anticipated cooperation from your personnel and the assumption that unexpected
circumstances will not be encountered during the audit, including significant changes in the size and
nature of the Partnership’s operations or the state of its accounting records and controls. 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.
The audit documentation for this engagement is the property of McMahan and Associates, L.L.C. and
constitutes confidential information. However, we are required to provide the HUD Secretary or his/her
designee, the HUD Inspector General, and the U.S. Government Accountability Office (“GAO”) or their
representatives access to audit documentation or any other documents needed to review the audit
(hardcopy or electronic). Access to audit documentation by HUD and GAO representatives includes
making necessary photocopies of any or all of the hardcopy audit documentation or any other documents
and/or electronic copies of any electronic audit documentation or any other electronic documents. We
may also be requested to make certain audit documentation available to peer reviewers. If requested,
access to such audit documentation will be provided under the supervision of McMahan and Associates,
L.L.C. personnel. We agree to retain our audit documentation or workpapers for a period of at least six
years from the date or our report.
You agree to inform us of facts that may affect the financial statements of which you may become aware
during the period from the date of the auditor’s report to the date the financial statements are issued.
We agree to retain our audit documentation or work papers for a period of at least five years from the
date of our report. Further, we will be available during the year to consult with you on financial
management and accounting matters of a routine nature.
During the course of the audit we may observe opportunities for economy in, or improved controls over,
your operations. We will bring such matters to the attention of the appropriate level of management,
either orally or in writing.
DocuSign Envelope ID: 832DA929-58C3-4511-B91F-0F4A6ACBE5B6
Board of Directors
Seniors on Broadway LP
December 16, 2021
Page 5
Please sign where indicated below to indicate your acknowledgment of, and agreement with, the
arrangements for our audit of the financial statements including our respective responsibilities. The
signed letter should be returned to us promptly.
We appreciate the opportunity to be of service to Seniors on Broadway LP and look forward to working
with you and your staff.
Very truly yours,
McMAHAN and ASSOCIATES, L.L.C.
This letter correctly sets forth the understanding of Seniors on Broadway LP with respect to the services
to be performed by McMahan and Associates, L.L.C.
SENIORS ON BROADWAY LP
BY:
Signature: _________________________________
Title: _________________________________
Date: _________________________________
DocuSign Envelope ID: 832DA929-58C3-4511-B91F-0F4A6ACBE5B6
12/27/2021
Executive Director
