town of emerald isle, north carolina · john d. masters, cpa 2. list of local office’s...

S.PrestonDouglas&Associates,LLPCertifiedPublicAccountants

TownofEmeraldIsle,NorthCarolina

TechnicalProposal

Lee Grissom, CPA, CFE, Partner S. Preston Douglas & Associates, LLP

907 N. Walnut Street Lumberton, NC 28358 (910) 739‐7523 ext. 220

DateofProposal–May19,2017

S.PrestonDouglas&Associates,LLPTechnicalProposalTableofContents

Page

1.AuditPersonnelbyLevel..............................................................................................................................1

2.ListofLocalOffice’sGovernmentalAuditClients...............................................................................1

3.AdditionalServices..........................................................................................................................................2

4.PeerReview........................................................................................................................................................2

5.ProfessionalExperienceinGovernmentalAudits..............................................................................4

6.RelevantEducationalBackground...........................................................................................................7

7.ProfessionalExperience ........................................................................................................ 10

8.SpecializedSkills,Training,andBackgroundinPublicFinance................................................11

9.References .............................................................................................................................. 12

10.PolicyandProceduresRegardingIndependence............................................................................13

11.LiabilityInsuranceCoverage ................................................................................................ 13

12.RegulatoryAction.........................................................................................................................................13

S. Preston Douglas & Associates, LLP ◊ www.spdouglas.com

1

1.AuditPersonnelbyLevel

Partnerincharge:

1.LeeGrissom,CPA,CFE

AuditStaff:

1.StephenParker,CPA

2.AustinEubanks,CPA

3.EricaEvans

ReviewPartner:

1. JohnD.Masters,CPA

2.ListofLocalOffice’sGovernmentalAuditClients

Unit

AlamanceCommunityCollege 6 Audit X

CalabashABCBoard 5+ Audit X

CityofArchdale 3 Audit X

CityofGreer,SC 6 Audit X

CityofLumberton 10+ Audit

LelandTourismDevelopmentAuthority 3 Audit X

LumbeeTribeofNorthCarolina 3 Audit X

LumbertonAreaVistorsBureau 3 Audit X

PembrokeTourismDevelopmentAuthority 3 Audit X

RobesonCountySchools 10+ Audit X

RobesonHealthCareCorporation 20+ Audit

ShallotteABCBoard 5+ Audit X

SoutheasternNCRegionalDevelopmentAuth. 10+ Audit X

TownofAtkinson 1 Audit X

TownofCalabash 5+ Audit X

TownofChadbourn 5+ Audit X

TownofCoats 1 Audit X

TownofFairmont 10+ Audit X

TownofGarland 5+ Audit

#ofYearsServed

TypeofService

PreparedUnderNewReportingModel

S. Preston Douglas & Associates, LLP ◊ www.spdouglas.com 2

2.ListofLocalOffice’sGovernmentalAuditClients(continued)

Unit

TownofGibson 5+ Audit X

TownofHollyRidge 5+ Audit

TownofLeland 5+ Audit X

TownofMarietta 10+ Audit X

TownofMaxton 10+ Audit X

TownofMcDonald 10+ Audit X

TownofOakIsland 3 Audit X

TownofOrrum 10+ Audit X

TownofParkton 5+ Audit X

TownofPembroke 10+ Audit X

TownofPinebluff 5+ Audit X

TownofProctorville 5+ Audit X

TownofRaynham 5+ Audit X

TownofRennert 5+ Audit X

TownofRowland 10+ Audit X

TownofSpringLake 2 Audit X

TownofSunsetBeach 10+ Audit

TownofSurfCity 5+ Audit

TownofTopsailBeach 3 Audit X

TownofWagram 3 Audit X

TownofWatha 1 Audit X

#ofYearsServed

TypeofService


3.AdditionalServices

Our firmprovides audit and bookkeeping services for governmental clients.On occasion,weprovide interim finance officer duties for municipalities, but we primary provide auditingservicestogovernmentalunits.

4.PeerReview

OurfirmisamemberoftheAmericanInstituteofCertifiedPublicAccountantsandparticipatesin a peer review program administered through the North Carolina Association of CertifiedPublicAccountants. Wearerequiredtoundergoarevieweverythreeyearsandhavebeenincompliancewiththequalitycontrolprogramsinceitbecamemandatoryinthelate1980's.Ourlatestpeerreviewreportisincludedonthefollowingpage.

WILLIAM V. ALLEN, Jr. CERTIFIED PUBLIC ACCOUNTANTS

2148 Margarita Drive, The Villages, FL 32159 352‐267‐4304 [email protected]

3

SYSTEM REVIEW REPORT January 16, 2014 To the Partners of S. Preston Douglas & Associates, LLP and the Peer Review Committee of the North Carolina Association of CPA’s We have reviewed the system of quality control for the accounting and auditing practice of S. Preston Douglas & Associates, LLP (the firm) in effect for the year ended July 31, 2013. Our peer review was conducted in accordance with Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. As a part of our peer review we considered reviews conducted by regulatory entities, if applicable, in determining the nature and extent of our procedures. The firm is responsible for designing a system of quality control and complying with it to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the firm’s compliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a System Review are described in the standards at www.aicpa.org/prsummary. As required by the standards, engagements selected for review included engagements performed under Government Auditing Standards and audits of employee benefit plans. In our opinion, the system of quality control for the accounting and auditing practice of S. Preston Douglas & Associates, LLP in effect for the year ended July 31, 2013, has been suitably designed and complied with to provide the firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency (ies) or fail.

S. Preston Douglas & Associates, LLP Firm has received a peer review rating of pass.

William V. Allen, Jr. William V. Allen, Jr., CPA


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5.ProfessionalExperienceinGovernmentalAudits

The professional experience in governmental audits of each senior and higher level personassignedtotheengagementisshowninthefollowingpages:

LeeGrissom,CPA,CFE

Unit Position

AlamanceCommunityCollege 6 SeniorAuditor X

CityofArchdale 3 SeniorAuditor X

CityofGreer,SC 6 SeniorAuditor X

CityofLumberton 2 SeniorAuditor

LumbeeTribeofNorthCarolina 3 SeniorAuditor X

RobesonCountySchools 3 SeniorAuditor X

TownofAtkinson 1 SeniorAuditor X

TownofBelhaven 2 SeniorAuditor X

TownofCoats 1 SeniorAuditor X

TownofGarland 5 SeniorAuditor

TownofLeland 2 SeniorAuditor X

TownofOrrum 3 SeniorAuditor X

TownofPinebluff 4 SeniorAuditor X

TownofRennert 3 SeniorAuditor X

TownofRowland 3 SeniorAuditor X

TownofSpringLake 2 SeniorAuditor X

TownofSurfCity 2 SeniorAuditor

TownofTopsailBeach 2 SeniorAuditor X

TownofWagram 2 SeniorAuditor X

TownofWatha 1 SeniorAuditor X

#ofYearsServed



5

5.ProfessionalExperienceinGovernmentalAudits(continued)

StephenParker,CPA

Unit Position

CityofLumberton 2 StaffAuditor X

PembrokeTourismDevelopmentAuthority 3 StaffAuditor X

TownofFairmont 8 StaffAuditor X

TownofGibson 6 StaffAuditor X

TownofMarietta 6 StaffAuditor X

TownofMaxton 6 StaffAuditor X

TownofMcDonald 6 StaffAuditor X

TownofParkton 6 StaffAuditor X

TownofPembroke 8 StaffAuditor X

TownofProctorville 6 StaffAuditor X

TownofRaynham 6 StaffAuditor X

TownofRennert 6 StaffAuditor X

TownofRowland 6 StaffAuditor X

TownofSt.Pauls 2 StaffAuditor X

#ofYearsServed



6

5.ProfessionalExperienceinGovernmentalAudits(continued)

AustinEubanks,CPA

Unit Position

AlamanceCommunityCollege 4 SeniorAuditor X

CityofArchdale 3 SeniorAuditor X

CityofGreer,SC 6 SeniorAuditor X

CommunitiesinSchoolsCharterSchool 2 SeniorAuditor X

LumbeeTribeofNorthCarolina 3 SeniorAuditor X

RobesonCountySchools 3 SeniorAuditor X

TownofAtkinson 1 SeniorAuditor X

TownofBelhaven 2 SeniorAuditor X

TownofCoats 1 SeniorAuditor X

TownofGarland 5 SeniorAuditor

TownofLeland 2 SeniorAuditor X

TownofPinebluff 4 SeniorAuditor X

TownofSpringLake 2 SeniorAuditor X

TownofSurfCity 2 SeniorAuditor

TownofTopsailBeach 2 SeniorAuditor X

TownofWagram 2 SeniorAuditor X

TownofWatha 1 SeniorAuditor X

#ofYearsServed


Thepercentageoftimeonsiteforeachseniorandhigherlevelpersonassignedtotheengagementisindicatedbelow:

Position

LeeGrissom,CPA,CFE 75% Partner

StephenParker,CPA 50% Manager

AustinEubanks,CPA 50% SeniorAuditor

EricaEvans 25% StaffAuditor

JohnMasters,CPA 10% ReviewPartner

PercentageofTimeonAudit


6.RelevantEducationalBackground

The following is a list of relevant educational background including seminars and coursesrelevant to governmental auditing thatwere attended by seniormembers of the audit teamwithinthelastthreeyears:

LeeGrissom,CPA,CFE

Education

B.S.,Accounting,NorthCarolinaStateUniversity

M.S.,Accounting,NorthCarolinaStateUniversity

Seminars/CoursesinGovernmentalAccounting

LocalGovernmentConference(2016)

2016healthcareIndustryConference(2016)

PerformingaSingleAudit(2016)

2015LocalGovernmentConference(2015)

ComprehendingOMBA‐133(2015)

GovernmentalandNonprofitUpdate(2015)

AssessingRisksofFraud(2015)

FoundationsinGovernmentalAccounting(2014)

FrequentFraudsFoundinGovernmentsandNonprofits(2014)



6.RelevantEducationalBackground(continued)

JohnD.Masters,CPA

Education

B.S.,Finance,UniversityofTennessee

M.S.,Accounting,MemphisStateUniversity


AnnualAICPAUpdate(2016)

FundamentalsforPerformingSingleAudits(2016)



GovernmentalandNonprofitAnnualUpdate(2015)


GovernmentalAuditingStandards(2015)



GovernmentalandNonprofitAnnualUpdate(2014)



NCLocalGovernmentAuditing,Reporting,andReview(2014)



StephenParker,CPA

Education

B.S.,Accounting,NorthCarolinaStateUniversity



UniformGuidance(2016)

TopGovernmentalandNFPAccounting&AuditingIssuesFacingCPA’s(2016





ComplianceAuditing(2015)

FoundationsinGovernmentalAccounting(2014)

FrequentFraudsFoundinGovernmentsandNonprofits(2014)




AustinEubanks,CPA

Education

B.S.,Accounting,NorthCarolinaatPembroke


AuditofSchoolDistricts(2016)

AdvanceTopicsinaSingleAudit(2016)

FundamentalsinPerformingSingleAudits(2016)

ComplianceAuditing–SchoolDistricts(2015)

LocalGovernmentConference(2015)

AuditsofState&LocalGovernments:Whatyouneedtoknow(2015)

FundamentalsofGovernmentAccountingandReporting(2015)



Governmental&NonprofitUpdate(2014)


7.ProfessionalExperience

Lee Grissom, III, CPA, CFE has over 12 years of experience auditing governmental and non‐profits.Leeisthein‐houseadministratorofcomputer‐based,frauddetectiontoolsforthefirm.Lee is also in chargeof scheduling,planning, andcoordinatingour firm’sgovernmental auditstaffforourthreeoffices.

JohnMasters, CPAhasover40 years of professional experience inpublic accounting, privateindustry,banking,andhighereducation.JohnwasamemberofadjunctfacultyattheUniversityofNorthCarolinaatPembrokeformorethan20years,teachingtwoaccountingcourses.

Stephen Parker, CPA has over 8 years of experience auditing governmental and non‐profits.Stephenhasalsoleadthewaytowardsa100%paperlessauditenvironmentaswelltheleaderinmultipletechnologyinitiativesforthefirm.


7.ProfessionalExperience(continued)

Austin Eubanks, CPA has over 5 years of experience auditing governmental and non‐profits.AustinspecializesinschoolauditsaswellasOMBGuidance(singleaudits)forthefirm.

8.SpecializedSkills,Training,andBackgroundinPublicFinance

Thefollowingisalistofspecializedskills,training,andbackgroundinpublicfinanceofassignedindividualsoftheauditteam:

LeeGrissom,CPA,CFE

Skills/Training

CertifiedFraudExaminer(CFE)

IDEADataExtraction/Analysis

ProfessionalOrganizations

AmericanInstituteofCertifiedPublicAccountants(AICPA)

NorthCarolinaAssociationofCertifiedPublicAccountants(NCACPA)

NCAVPAMemberConnectionCommittee,Member

NorthCarolinaCPACertificate#33564

AssociationofCertifiedFraudExaminers,License#562210(ACFE)

JohnD.Masters,CPA

Skills/Training

Johnhasover30yearsofexperienceinauditingthepublicsector.






8.SpecializedSkills,Training,andBackgroundinPublicFinance(continued)

StephenParker,CPA

Skills/Training

Stephenhas8yearsofexperienceinauditingthepublicsector.





AustinEubanks,CPA

Skills/Training

Austinhas5yearsofexperienceinauditingthepublicsector.





9.References

Thefollowingisalistofauditclientswhomaybecontactedforareference.

Client Contact Addresses Phone

CityofGreer,SC DavidSeifert 301E.PoinsettStreetGreer,SC29651 (864)848‐2185

TownofCoats KarenWooten 25E.MainStreetCoats,NC27521 (910)897‐5183ex33

TownofSpringLake ClaiburnWatson 300RuthStreetSpringLake,NC28390 (919)724‐0456

TownofPembroke MarieMoore POBox866Pembroke,NC28372 (910)521‐9758

TownofFairmont LindaVause 421SouthMainStreetFairmont,NC28340 (910)628‐9766


10.PolicyandProceduresRegardingIndependence

Ourqualitycontroldocumentandourprofessionalstandardsrequireustobeindependentinfactandinappearance.Wereceive,atleastannually,awrittenrepresentationfromallpartnersandemployeesastopersonalandbusinessrelationshipstoallclients.

11.LiabilityInsuranceInformation

OurfirmhascontractedwithContinentalCasualtyCompanyforliabilityinsurancecoverageintheamountof$1,000,000perclaimand$1,000,000intheaggregate.

12.RegulatoryAction

Ourfirmhasneverhadanyregulatoryactionimposedonitbyanyoversightboard.

S.PrestonDouglas&Associates,LLPCertifiedPublicAccountants

TownofEmeraldIsle,NorthCarolina

CostProposal

FiscalYearEndedJune30,2017



Lee Grissom, CPA, CFE, Partner S. Preston Douglas & Associates, LLP

907 N. Walnut Street Lumberton, NC 28358 (910) 739‐7523 ext. 220

DateofProposal–May19,2017

S.PrestonDouglas&Associates,LLPCostProposal

TableofContents

Page

1.AuditProgramUsed..........................................................................................................................1

2.StatisticalSampling.........................................................................................................................................1

3.UseofComputerAuditSpecialists............................................................................................................1

4.OrganizationofAuditTeam........................................................................................................................2

5.InformationContainedinManagementLetter....................................................................................2

6.AssistanceExpectedfromStaff..................................................................................................................2

7.TentativeScheduleforCompletingtheAudit......................................................................................3

8.SpecifiedCosts..................................................................................................................................................3

9.AdditionalInformation..................................................................................................................................5

10.SummaryofAuditCostsSheet...................................................................................................................6


1

1.AuditProgramUsed

The audit program that will be used for your audit is based on the standard governmentapproach developed by Practitioners Publishing Company (PPC). PPC audit programs andchecklists are updated annually for changes in generally accepted accounting standards,Codification of Governmental Accounting Guides, generally accepted governmental auditingstandardsandtheGAO’sGovernmentalAuditingStandards.

2.StatisticalSampling

Weusevarioussamplingmethodsinselectingauditevidence.Themethodweselectdependsonthesizeofthepopulationsampledaswellasriskfactorsthatarespecifictotheclient.Wewilluse PPC Sampling worksheets (along with auditor judgment) to determine the size of oursamples.

Oftentimes, to obtain sufficient audit evidence on a population selected for testing, we useComputer Assisted Audit Techniques (CAATs). CAAT's provide a convenientway to performprocedures on 100% of transactions and account balances. Not only does CAAT's provideessential audit evidence, they normally result in less assistance required of your staff sinceadditionaltesting,documentation,andprintingofreportsisreduced.Ourpreferenceistoaudit"throughthecomputer,notaroundthecomputer."

3.UseofComputerAuditSpecialists

None.


2

4.OrganizationofAuditTeam

Your auditwill be conductedby aPartner‐in‐Charge, other partners and staff, as needed, andsupportpersonnel.

1. Partner‐in‐Charge–thePartner‐in‐Chargewillbeactively involved inallstagesof theaudit.

2. AuditStaff–fouradditionalstaffmemberswillbeavailable,asneeded.

3. ReviewPartner–onereviewpartnerwillbeavailable forpurposesofqualitycontrolovertheauditedfinancialstatements.

4. Support Personnel – support personnel will be used for word processing/typing ofstatementsandbindingoffinalreport,aswellasanyotheradministrativetasksrelatedtotheaudit.

5.InformationContainedinManagementLetter

The Partner‐in‐Charge will review all workpapers and communicate any findings tomanagement in an exit conference. Any potential findings, questioned costs, or possibleManagement Letter comments will be discussed with the appropriate personnel in a timelymanner. The Management Letter will document any comments for the board or financialmanagementteamsuchasdeficienciesandweaknessesinanentity’sorganizationstructure.

6.AssistanceExpectedfromStaff

Duringtheplanningstageoftheaudit,wewillworkwithyourstafftodeterminewhatreportscanbeproducedfromyouraccountingsoftware.

WewillfurnishyourstaffwithanAuditRequestList.Forefficiencypurposes,wetailortheAuditRequestList toeachclient. Ourgoal is to include90‐95%ofallrequests intheAuditRequestList.

Duringthefieldworkstageoftheaudit,pleasehavedepartmentheadsandotherstaffavailableforinterviewssothatwecanperformourinternalcontrolassessments.


3

7.TentativeScheduleforCompletingtheAudit

Thetentativescheduleforcompletingtheauditisshownbelow:

Activity June Aug/Sept. October

Conductplanningmeetingwithpersonnel X

Sendauditrequestlist X

Performinterimauditprocedures X

Performananalyticalreview X

Identifymajorauditareasandrisks X

Performremainingauditprocedures X

Conductexitconferencewithpersonnel X

Preparefinancialstatements X

Deliverfinancialstatements X

8.SpecifiedCosts

Thetotalpersonnelcostslistedinthissectionare“not‐to‐exceed”amounts.

A. PersonnelCostsbyCategory

Partners 8 24 7 39 160.00 6,240.00$SeniorAuditStaff 8 24 16 48 145.00 6,960.00StaffAccountants 0 8 0 8 100.00 800.00

TotalPersonnelCosts(not‐to‐exceed) 14,000.00$

YearEndedJune30,2017

On‐SiteInterim

On‐SiteYearEnd

Auditor'sOffice

RateperHour TotalCost

EstimatedHours

PersonnelCategory Total

B. Travel‐noseparatechargefortravel.

C. CostofSuppliesandMaterials‐noseparatechargeforthecostofsuppliesandmaterial.

D. OtherCosts‐noseparatechargeforothercosts.

E. DeterminingIncreases–increasesarebasedoncostoflivingadjustments.


4

8.SpecifiedCosts(continued)

A. EstimatedPersonnelCostsbyCategory




EstimatedHours

PersonnelCategory

On‐SiteInterim

On‐SiteYearEnd

Auditor'sOffice Total

RateperHour TotalCost






5

8.SpecifiedCosts(continued)

A. EstimatedPersonnelCostsbyCategory




TotalRateperHour TotalCost

EstimatedHours

PersonnelCategory

On‐SiteInterim

On‐SiteYearEnd

Auditor'sOffice





9.AdditionalInformation

Wedonotbill forquestions/comments/telephonecalls/etc.during theyear,unless theyarecomplex and time consuming. Our clients routinely ask about budgets, internal controls,grants,andpayrollwithoutincurringanyadditionalcharges.


6

1 BaseAudit(GeneralPurposeFinancialStatements) $ 14,000.00IncludesPersonnelcosts,travel,andon‐sitework

2 FinanialStatementPreparation includedinbaseaudit

3 ExtraAuditService($80‐$160perhour) $ whenapplicable

4 Other(pleaseexplain) $ ‐


TOTAL $ 14,000.00

AUDITCOSTSUMMARYSHEETFiscalYearEndingJune30,2017


7






TOTAL $ 14,250.00

AUDITCOSTSUMMARYSHEETFiscalYearEndingJune30,2018

"Estimated"







TOTAL $ 14,500.00

FiscalYearEndingJune30,2019

"Estimated"

AUDITCOSTSUMMARYSHEET

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