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HomeMy WebLinkAboutRogers, Anderson, Malody & Scott, LLP-2012-08 • in R • frILA ROGERS,ANDERSON.MALODY&SCOTT, LLP -M CERTIFIED PUBLIC ACCOUNTANTS.SINCE 1948 735 E.Carnegie Dr.Suite 100 San Bernardino.CA 92408 March 29, 2012 909 BB9 0871 T 909 B89 5361 F ian scpa.net Betsy Adams BTNEBS City of Grand Terrace n..,nda a Odle.as MST 22795 Barton Road T=c y V 5nns.CPA KIP l,A'conks CPA Grand Terrace, CA 92313 W Oafflfew R nn on.CPA MSA 5ScoffW Manna.CPA 1 coop Slonitnag CAA M51 ze,<ne, CPA,Ref mLi We are pleased to confirm our understanding of the nature and limitations of PMnp,n1 Walk, CPA!Rene, the services we are to provide for the City of Grand Terrace(City). HANAGYP S n STAFF We will apply the agreed-upon procedures which the City has specified, listed R„�br(]A C vcpPA MRA in the attached schedule, to assist management in evaluating the sewer billing services as provided to the City by Riverside Highland Water Company (Company)for 2009, 2010, and 2011. Our engagement to apply agreed-upon procedures will be conducted in accordance with attestation standards Maya S No nwa.CPA.MBA Damclle z Odger,.CPA established by the American Institute of Certified Public Accountants. The .v.11 a^,C aayl=l, CI'A sufficiency of the procedures is solely the responsibility of those parties specified in the report. Consequently, we made no representation regarding IIVIMegan Hacknforey. MPpl CPA the sufficiencyof theprocedures described below either for the purpose for Mesa- 1arl.nny.CPA P P which this report has been requested or for any other purpose. If, for any c ce snnn eve reason, we are unable to complete the procedures, we will describe any restrictions on the performance of the procedures in our report, or will not issue a report as a result of this engagement. Because the agreed-upon procedures listed in the attached schedule do not constitute an examination, we will not express an opinion on the evaluation of Company's compliance with the Agreement. In addition, we have no obligation to perform any procedures beyond those listed in the attached schedule. We will submit a report listing the procedures performed and our findings. This report is intended solely for the use of City, and should not be used by those who did not agree to the procedures and take responsibility for the sufficiency MEMRENS of the procedures for their purposes. Our report will contain a paragraph A„e„<,r Institute of Indicating that had we performed additional procedures, other matters might c,,nrcc Pi:,ln Aecomman„ have come to our attention that would have been reported to you. FCPS Toe AICPA Mlionu' We plan to begin our procedures as soon as we receive this signed engagement letter, and unless unforeseeable problems are encountered, the can^Ir Cr engagement should be completed within four weeks. At the conclusion of our - nia nrH,y nr engagement, we will require a representation letter from you that, among other things, will confirm management's responsibility for the presentation of the evaluation of compliance. STABILITY. ACCURACY. TRUST. Betsy Adams, City Manager March 29, 2012 City of Grand Terrace Page 2 We estimate that our fees for these services will be in the range of$4,500 to $6,500. The fee estimate is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the engagement. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. 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 expenditures through date of termination. We appreciate the opportunity to assist you and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please do not hesitate to call our office. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. If the need for additional services arises, our agreement with you will need to be revised. It is customary for us to enumerate these revisions in an addendum to this letter. If additional specified parties of the report are added, we will require that they acknowledge in writing their responsibility for the sufficiency of procedures. Sincerely, ROGERS,ANDERSON, MALODY&SCOTT, LLP 1 Terry Pcaffea, CPA RESPONSE: This letter correctly sets/ / Title: forth the understanding of City of Grand Terrace. ,!D //// Date: T —cJa �� AGREED-UPON PROCEDURES Project Scope Review sufficient evidence and perform sufficient analytical procedures to determine to a reasonable degree that: A. For calendar years 2009, 2010, and 2011 that Riverside Highland Water Company (RHWC) billed the proper number of residential,multifamily, and commercial sewer user accounts for the City of Grand Terrace Sewer user fees. B. For calendar years 2009, 2010, and 2011 that RHWC billed the proper fee for residential, multifamily, and commercial sewer user accounts for the City of Grand Terrace Sewer user fees in accordance with City of Grand Terrace Resolution. C. The amount paid to City of Grand Terrace for sewer collections for calendar years 2009, 2010, and 2011 reconciles to collections recorded in RHWC trial balance and general ledger for those years. D. Amount remitted to the City of Grand Terrace for sewer user fees is reasonable in relation to all fees collected. Procedures I) Document billing procedures for Riverside Highland Water Company. 2) Document cash receipt and crediting procedures by type of billing paid (water, sewer, other). 3) Analyze whether commercial customers are being billed correctly and in accordance with the adopted requirements of the City of Colton, which the City of Grand Terrace follows, including new ordinance and rates. 4) Document total billings for 2009, 2010,2011 and analyze billings by type (water, sewer, other). 5) Document total collections for 2009, 2010, 2011 and analyze billings by type (water, sewer,other). 6) For three years starting with RHWC's trial balance at 12/31/2008 analyze billings and collections and compare to ending trial balance at 12/31/20xx. Analyze and make inquires of any differences. 7) Determine customer accounts receivable for all billings for each year at 12/31/xx, and determine amount of each type of receivable(water, sewer other). 8) Verify that the accounts receivable from billing trial balance match general ledger. 9) Verify that billing accounts receivable in general ledger match the detailed receivable by customer. 10)Trace cash receipts to customer accounts on a sample basis. Analyze differences. 11)Compare year end customer trial balances to RHWC General Ledger. 12)Compare total cash receipts deposited in bank to cash collections for all three years. 13)Analyze sample of commercial billings and determine if the amounts billed are in accordance with the City of Grand Terrace's resolutions or ordinances. Analyze and document any discrepancies.