HomeMy WebLinkAboutGE23-01 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
Matthew D. Miller, CPA Frisco: (970) 668-3481
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January 11, 2023
Board of Directors
Golden Eagle Elderly Housing Corporation
c/o Eagle County
P.O. Box 850
Eagle, Colorado 81631-0850
Dear Board members:
You have requested that we audit the business activities of Golden Eagle Elderly Housing Corporation
(the “Corporation”and a component unit of Eagle County, Colorado) and the aggregate remaining fund
information of the Corporation as of December 31, 2022 and for the year then ended, and the related
notes, which collectively comprise the Corporation’s basic financial statements.
We are pleased to confirm our acceptance and our understanding of this audit engagement by means of
this letter.
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 (“U.S. 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.
Accounting principles generally accepted in the United States of America (“U.S. GAAP”), as promulgated
by the Governmental Accounting Standards Board (“GASB”)require that management’s discussion and
analysis (“MD&A”) be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the GASB, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. It is our understanding that the Corporation will not present
an MD&A to accompany its 2022 financial statements, and our report will reference this omission.
Supplementary information other than RSI will accompany the Corporation’s basic financial statements.
We will subject the following supplementary information to the auditing procedures applied in our audit of
the basic financial statements and perform certain additional procedures, including comparing and
reconciling the supplementary information to the underlying accounting and other records used to prepare
the basic financial statements or to the basic financial statements themselves, and additional procedures
in accordance with U.S. GAAS. We intend to provide an opinion on the following supplementary
information in relation to the basic financial statements as a whole:
Schedule of revenues, expenses, and changes in net position –Budget and actual comparison
Schedules required by the United States Department of Agriculture RD
Handbook HB-2-3560 (the “USDA Handbook”)
DocuSign Envelope ID: 1F7ED940-802E-4513-9F8B-D5FCC7ED043B
January 11, 2023
To the Board of Directors
Golden Eagle Elderly Housing Corporation
Page 2
Auditor Responsibilities
We will conduct our audit in accordance with U.S. GAAS. As part of an audit in accordance with U.S.
GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit.
We will 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 Corporation’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.
Conclude, based on the audit evidence obtained, whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Corporation’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 U.S. GAAS.
Our responsibility as auditors is limited to the period covered by our audit and does not extend to any
other periods.
Audit Procedures –Compliance
As previously discussed, as part of obtaining reasonable assurance about whether the basic financial
statements are free of material misstatement, we will perform tests of the Corporation’s compliance with
the provisions of applicable laws, regulations, contracts, and agreements. However, the objective of our
audit will not be to provide an opinion on overall compliance and we will not express such an opinion.
Management Responsibilities
Our audit will be conducted on the basis that management and, when appropriate, those charged with
governance, acknowledge and understand that they have responsibility:
1.For the preparation and fair presentation of the basic financial statements in accordance with U.S.
GAAP;
2.For the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of basic 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;
3.To provide us with:
a.Access to all information of which management is aware that is relevant to the preparation
and fair presentation of the basic financial statements such as records, documentation, and
other matters;
b.Additional information that we may request from management for the purpose of the audit;
DocuSign Envelope ID: 1F7ED940-802E-4513-9F8B-D5FCC7ED043B
January 11, 2023
To the Board of Directors
Golden Eagle Elderly Housing Corporation
Page 3
Management Responsibilities (continued)
c.Unrestricted access to persons within the Corporation from whom we determine it necessary
to obtain audit evidence;
4.For including the auditor’s report in any document containing basic financial statements that
indicates that such basic financial statements have been audited by us;
5.For identifying and ensuring that the Corporation complies with the laws and regulations
applicable to its activities;
6.For adjusting the basic 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 period under audit
are immaterial, both individually and in the aggregate, to the basic financial statements as a
whole;
7.For acceptance of non-attest services, including identifying the proper party to oversee non-attest
work;
8.For maintaining adequate records, selecting and applying accounting principles, and
safeguarding assets;
9.For informing us of any known or suspected fraud affecting the involving management,
employees with significant role in internal control and others where fraud could have a material
effect on the financials; and
10.For the accuracy and completeness of all information provided.
With regard to the supplementary information referred to above, you acknowledge and understand your
responsibility: (a) for the preparation of the supplementary information in accordance with the applicable
criteria; (b) to provide us with the appropriate written representations regarding supplementary
information; (c) to include our report on the supplementary information in any document that contains the
supplementary information and that indicates that we have reported on such supplementary information;
and (d) to present the supplementary information with the audited basic financial statements, or if the
supplementary information will not be presented with the audited basic financial statements, to make the
audited basic financial statements readily available to the intended users of the supplementary
information no later than the date of issuance by you of the supplementary information and our report
thereon.
As part of our audit process, we will request from management and, when appropriate, those charged
with governance, written confirmation concerning representations made to us in connection with the audit.
Non-attest Services
With respect to any non-attest services we perform, at the end of the year, we agree to perform the
following:
Preparation of the Corporation’s financial statements and related notes
Propose adjusting or correcting journal entries to be reviewed and approved by the the
Corporation’s management.
We will not assume management responsibilities on behalf of the Corporation. However, we will provide
advice and recommendations to assist management of about the Corporation in performing its
responsibilities.
the Corporation’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.
DocuSign Envelope ID: 1F7ED940-802E-4513-9F8B-D5FCC7ED043B
January 11, 2023
To the Board of Directors
Golden Eagle Elderly Housing Corporation
Page 4
Non-attest Services (continued)
Our responsibilities and limitations of the non-attest services are as follows:
We will perform the services in accordance with applicable professional standards.
The non-attest services are limited to the services 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.
Reporting
We will issue a written report upon completion of our audit of the Corporation’s basic financial statements.
Our report will be addressed to the Corporation’s 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 opinions, add an emphasis-
of-matter or other-matter paragraph(s) to our auditor’s report, or if necessary, withdraw from the
engagement. If our opinions on the basic financial statements are 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 opinions, we may decline to express opinions or to issue a report as a result of
this engagement.
Engagement Administration
Michael Jenkins is the engagement partner and is responsible for supervising the engagement and
signing the report or authorizing another individual to sign it. Additional firm personnel will be assigned to
the engagement as considered necessary. W e will begin our audit and issue our reports on a mutually
agreed-upon timeframe.
We understand that your employees will prepare all cash or other confirmations, reconciliations, or work
papers we request and will locate any documents selected by us for testing.
If you intend to publish or otherwise reproduce the basic 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.
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.
DocuSign Envelope ID: 1F7ED940-802E-4513-9F8B-D5FCC7ED043B
January 11, 2023
To the Board of Directors
Golden Eagle Elderly Housing Corporation
Page 5
Engagement Administration (continued)
The audit documentation for this engagement is the property of McMahan and Associates, L.L.C. and
constitutes confidential information. However, pursuant to authority given by law or regulation, we may be
requested to make certain audit documentation available to the Corporation’s cognizant or oversight
agency or its designee, a federal agency providing direct or indirect funding, or the U.S. Government
Accountability Office, or peer reviewers for purposes of a quality review of the audit, to resolve audit
findings, or to carry out oversight responsibilities. If requested, access to such audit documentation will
be provided under the supervision of McMahan and Associates, L.L.C. personnel. Furthermore, upon
request, we may provide copies of selected audit documentation to the aforementioned parties. These
parties may intend, or decide, to distribute the copies or information contained therein to others, including
other governmental agencies.
During the course of the audit, we may observe opportunities for econom y 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. At the conclusion of our audit engagement, we will communicate to the
Corporation’s Board of Directors the following significant findings from the audit:
Our view about the qualitative aspects of the Corporation’s significant accounting practices;
Significant difficulties, if any, encountered during the audit;
Uncorrected misstatements, other than those we believe are trivial, if any;
Disagreements with management, if any;
Other findings or issues, if any, arising from the audit that are, in our professional judgment,
significant and relevant to those charged with governance regarding their oversight of the
financial reporting process;
Material, corrected misstatements that were brought to the attention of management as a result of
our audit procedures;
Representations we requested from management;
Management’s consultations with other accountants, if any; and
Significant issues, if any, arising from the audit that were discussed,or the subject of
correspondence, with management.
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.
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.
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 the
engagement. However, we estimate that our fee for the 2022 financial statement audit will not exceed
$8,900. 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 Corporation’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.
DocuSign Envelope ID: 1F7ED940-802E-4513-9F8B-D5FCC7ED043B
January 11, 2023
To the Board of Directors
Golden Eagle Elderly Housing Corporation
Page 6
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, and 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 look
forward to working with you and your staff on this engagement. Please sign where indicated below to
indicate your acknowledgment of, and agreement with, the arrangements for this engagement, including
our respective responsibilities.
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: 1F7ED940-802E-4513-9F8B-D5FCC7ED043B
Executive Director
1/12/2023
