Eide Bailly Audit Engagement AgreementTHE CITY OF
Dui
Masterpiece on the Mississippi
Dubuque
band
AI -America City
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2007 • 2012 • 2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Eide Bailly Audit Engagement Agreement for Fiscal Year Ending June 30,
2014
DATE: May 29, 2014
Finance Director Ken TeKippe is recommending approval of the audit engagement
agreement for year ending June 30, 2014 audit from Eide Bailly.
Effective with Fiscal Year 2008, auditing standards require that the City Manager advise
the City Council that the annual audit engagement letter has been signed and share
information contained in the audit engagement letter and provide an additional letter to
the Mayor and City Council relative to the audit.
City Attorney Barry Lindahl and Finance Director Ken TeKippe have reviewed this
year's agreement.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Ws,
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Ken TeKippe, Finance Director
Masterpiece on the Mississippi
Dubuque
AIl•Amerlca City
I
2007 • 2012 • 2013
TO: Mike Van Milligen, City Manager
FROM: Ken TeKippe, Finance Director
SUBJECT: Eide Bailly Audit Engagement Agreement for fiscal year ending June 30, 2014
DATE: May 29, 2014
Enclosed is the audit engagement agreement for year ending June 30, 2014 audit from
Eide Bailly. In April, 2011 you signed a five-year audit service agreement, however the
firm issues individual detailed engagement agreements yearly. This is the fourth year of
our five year agreement.
Effective with fiscal year 2008, auditing standards require that the City Manager advise
the City Council that the annual audit engagement letter has been signed and share
information contained in the audit engagement letter and provide an additional letter to
the Mayor and City Council relative to the audit. Also enclosed is a letter addressed to
the Mayor and City Council relative to the audit.
Barry and I have reviewed this year's agreement. Please have the Mayor sign the
agreement and return to me and I will retain a copy for our files.
If you have any questions on this request, please feel free to contact me at 4133.
KT/em I
Ericlosure(s)
0
1
CPAs & BUSINESS ADVISORS
May 23, 2014
Mr. Ken TeKippe
Honorable Mayor and Members of the City Council
City of Dubuque, Iowa
50 West 13th Street
Dubuque, IA 52001
We are pleased to confirm our understanding of the services we are to provide the City of Dubuque, IA (City), for the
year ending June 30, 2014. We will audit the financial statements of the governmental activities, the business -type
activities, the discretely presented component units, each major fund, and the aggregate remaining fund information,
including the related notes to the financial statements, which collectively comprise the basic financial statements, of
the City of Dubuque as of and for the year ending June 30, 2014. Accounting standards generally accepted in the
United States of America provide for certain required supplementary information (RSI), such as management's
discussion and analysis (MD&A), to supplement the City's basic financial statements. Such information, although
not a part of the basic financial statements, is required by the Governmental Accounting Standards Board 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. As part of our engagement, we will apply certain limited procedures to
the City's RSI in accordance with auditing standards generally accepted in the United States of America. These
limited procedures will consist principally of inquiries of management regarding the methods of preparing the
information and comparing the information for consistency with management's responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will
not express an opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance. The following RSI is required by generally
accepted accounting principles and will be subjected to certain limited procedures, but will not be audited:
1 Management's Discussion and Analysis.
2. Budgetary comparison schedule.
3. Schedule of Funding Progress for the Retiree Benefit Plan
We have also been engaged to report on supplementary information other than RSI that accompanies the City's
financial statements. We will subject the following supplementary information 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 will provide an opinion on it in relation to the financial statements as a
whole:
1. Schedule of expenditures of federal awards.
2. Combining fund financial statements.
3. Financial data schedule (Section 8).
www.eidebailly.com
3999 Pennsylvania Ave., Ste. 100 1 Dubuque, IA 52002-2273 1 T 563.556.1790 1 F 563.557.7842 1 EOE
1
The following other information accompanying the financial statements will not be subjected to the auditing
procedures applied in our audit of the financial statements, and our auditor's report will not provide an opinion or
any assurance on that other information.
1. Introductory section.
2. Statistical tables.
Audit Objectives
The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly
presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on
the fairness of the supplementary information referred to in the second paragraph when considered in relation to the
financial statements as a whole. The objective also includes reporting on —
• Internal control related to the financial statements and compliance with the provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a material effect on the financial
statements in accordance with Government Auditing Standards.
• Internal control related to major programs and an opinion (or disclaimer of opinion) on compliance with
laws, regulations, and the provisions of contracts or grant agreements that could have a direct and
material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and
OMB Circular A-133, Audits of States, Local Governments, and Non -Profit Organizations.
The Government Auditing Standards report on internal control over financial reporting and compliance and other
matters will include a paragraph that states (1) that the purpose of the report is solely to describe the scope of
testing of internal control and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the entity's internal control or on compliance, and (2) that the report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity's internal control and
compliance. The OMB Circular A-133 report on internal control over compliance will include a paragraph that
states that the purpose of the report on internal control over compliance is solely to describe the scope of testing
of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-
133. Both reports will state that the report is not suitable for any other purpose.
Our audit will be conducted in accordance with auditing standards generally accepted in the United States of
America; the standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions of OMB
Circular A-133, and will include tests of accounting records, a determination of major program(s) in accordance
with OMB Circular A-133, and other procedures we consider necessary to enable us to express such opinions. We
will issue written reports upon completion of our Single Audit. Our reports will be addressed to the Honorable
Mayor, Members of the City Council, and Management of the City of Dubuque. We will make reference to Honkamp
Krueger & Company's audit of Dubuque Initiatives and Subsidiaries in our report on your financial statements. We
cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is
necessary for us to modify our opinions or add emphasis -of -matter or other -matter paragraphs. If our opinions on
the financial statements or the Single Audit compliance opinions 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 issue reports, or may withdraw from this engagement.
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Management Responsibilities
Management is responsible for the financial statements, schedule of expenditures of federal awards, and all
accompanying information as well as all representations contained therein. Management is also responsible for
identifying all federal awards received and understanding and complying with the compliance requirements, and
for preparation of the schedule of expenditures of federal awards (including notes and noncash assistance
received) in accordance with the requirements of OMB Circular A-133. As part of the audit, we will assist with
preparation of the schedule of expenditures of federal awards. This nonaudit service does not constitute an audit
under Government Auditing Standards and such services will not be conducted in accordance with Government
Auditing Standards. You agree to assume all management responsibilities relating to the schedule of expenditures
of federal awards and any other nonaudit services we provide. You will be required to acknowledge in the
management representation letter our assistance with preparation of the schedule of expenditures of federal
awards, and that you have reviewed and approved the financial statements, schedule of expenditures of federal
awards, and related notes prior to their issuance and have accepted responsibility for them. Further, you agree to
oversee the nonaudit services by designating an individual, preferably from senior management, who possesses
suitable skill, knowledge, or experience; evaluate the adequacy and results of those services; and accept
responsibility for them.
Management is responsible for (a) establishing and maintaining effective internal controls, including internal
controls over compliance, and for evaluating and monitoring ongoing activities, to help ensure that appropriate
goals and objectives are met; (b) following laws and regulations; (c) ensuring that there is reasonable assurance
that government programs are administered in compliance with compliance requirements; and (d) ensuring that
management is reliable and financial information is reliable and properly reported. Management is also
responsible for implementing systems designed to achieve compliance with applicable laws, regulations,
contracts, and grant agreements. 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 U.S. generally
accepted accounting principles; and for compliance with applicable laws and regulations and the provisions of
contracts and grant agreements.
Management is also responsible for making all financial records and related information available to us and for
the accuracy and completeness of that information. 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 government from whom we determine it necessary to obtain audit evidence.
Your responsibilities also include identifying significant vendor relationships in which the vendor has
responsibility for program compliance and for the accuracy and completeness of that information. 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 government 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 your knowledge of any
allegations of fraud or suspected fraud affecting the government received in communications from employees,
former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring
that the government complies with applicable laws, regulations, contracts, agreements, and grants. Management is
also responsible for taking timely and appropriate steps to remedy fraud and noncompliance with provisions of
laws, regulations, contracts, and grant agreements, or abuse that we report. Additionally, as required by OMB
3
Circular A-133, it is management's responsibility to follow up and take corrective action on reported audit
findings and to prepare a summary schedule of prior audit findings and a corrective action plan. The summary
schedule of prior audit findings should be available for our review on November 1, 2014.
You are responsible for preparation of the schedule of expenditures of federal awards (including notes and
noncash assistance received) in conformity with OMB Circular A-133. You agree to include our report on the
schedule of expenditures of federal awards in any document that contains and indicates that we have reported on
the schedule of expenditures of federal awards. You also agree to include the audited financial statements with
any presentation of the schedule of expenditures of federal awards that includes our report thereon. Your
responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for
presentation of the schedule of expenditures of federal awards in accordance with OMB Circular A-133; (2) you
believe the schedule of expenditures of federal awards, including its form and content, is fairly presented in
accordance with OMB Circular A-133; (3) 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 schedule of
expenditures of federal awards.
You are also responsible for the preparation of the other supplementary information, which we have been engaged
to report on, in conformity with U.S. generally accepted accounting principles. 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 written representation letter that (1) you are responsible for presentation of the supplementary information
in accordance with GAAP; (2) you believe the supplementary information, including its form and content, is
fairly presented in accordance with GAAP; (3) 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.
Management is responsible for establishing and maintaining of a process for tracking the status of audit findings and
recommendations. Management is also responsible for identifying for us previous financial audits, attestation
engagements, performance audits, or other studies related to the objectives discussed in the Audit Objectives section
of this letter. This responsibility includes relaying to us corrective actions taken to address significant findings and
recommendations resulting from those audits, attestation engagements, performance audits, or studies. You are also
responsible for providing management's views on our current findings, conclusions, and recommendations, as well as
your planned corrective actions, for the report, and for the timing and format for providing that information.
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 Procedures -General
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) misappropriation of assets, or (4) violations of laws or governmental regulations
that are attributable to the entity or to acts by management or employees acting on behalf of the government.
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Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to
provide reasonable assurance of detecting abuse.
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 or
noncompliance may exist and not be detected by us, even though the audit is properly planned and performed in
accordance with U.S. generally accepted auditing standards and Government Auditing Standards. 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 fmancial statements or major programs. However, we will inform the
appropriate level of management of any material errors and any 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, and of any material abuse that
comes to our attention. We will include such matters in the reports required for a Single Audit. 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 procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and
may include direct confirmation of receivables and certain other assets and liabilities by correspondence with selected
individuals, funding sources, creditors, and financial institutions. We will 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 your responsibilities for the financial
statements; schedule of expenditures of federal awards; federal award programs; compliance with laws, regulations,
contracts, and grant agreements; and other responsibilities required by generally accepted auditing standards.
Audit Procedures -Internal Controls
Our audit will include obtaining an understanding of the entity 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. Tests of controls may be performed to test the effectiveness of certain controls that
we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to
preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a
direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be
necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on
internal control issued pursuant to Government Auditing Standards.
As required by OMB Circular A-133, we will perform tests of controls over compliance to evaluate the effectiveness
of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance
with compliance requirements applicable to each major federal award program. However, our tests will be less in scope
than would be necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our
report on internal control issued pursuant to OMB Circular A-133.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material
weaknesses. However, during the audit, we will communicate to management and those charged with governance
internal control related matters that are required to be communicated under AICPA professional standards,
Government Auditing Standards, and OMB Circular A-133.
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Audit Procedures -Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement,
we will perform tests of the City's compliance with provisions of applicable laws, regulations, contracts, and
agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion
on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to
Government Auditing Standards.
OMB Circular A-133 requires that we also plan and perform the audit to obtain reasonable assurance about whether
the auditee has complied with applicable laws and regulations and the provisions of contracts and grant agreements
applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures
described in the OMB Circular A-133 Compliance Supplement for the types of compliance requirements that could
have a direct and material effect on each of the City's major programs. The purpose of those procedures will be to
express an opinion on the City's compliance with requirements applicable to each of its major programs in our
report on compliance issued pursuant to OMB Circular A-133.
Engagement Administration, Fees, and Other
We understand that your employees will prepare all cash, or other confirmations we request and will locate any
documents selected by us for testing.
At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection Form that
summarizes our audit findings. It is management's responsibility to submit the reporting package (including financial
statements, schedule of expenditures of federal awards, summary schedule of prior audit findings, auditor's reports, and
corrective action plan) along with the Data Collection Form to the federal audit clearinghouse. We will coordinate with
you the electronic submission and certification. If applicable, we will provide copies of our report for you to include
with the reporting package you will submit to pass-through entities. The Data Collection Form and the reporting
package must be submitted within the earlier of 30 days after receipt of the auditor's reports or nine months after the
end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for
audits.
We will provide copies of our reports to the City; however, management is responsible for distribution of the reports
and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential
information, copies of our reports are to be made available for public inspection.
The audit documentation for this engagement is the property of Eide Bailly LLP and constitutes confidential
information. However, subject to applicable laws and regulations, audit documentation and appropriate
individuals will be made available upon request and in a timely manner to federal cognizant or grantor agencies or
their designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability
Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight
responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be
provided under the supervision of Eide Bailly LLP 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.
The audit documentation for this engagement will be retained for a minimum of five years after the report release
or for any additional period requested by the federal cognizant or grantor agencies. If we are aware that a federal
awarding agency, pass-through entity, or auditee is contesting an audit finding, we will contact the party(ies)
contesting the audit finding for guidance prior to destroying the audit documentation.
6
We expect to begin our audit in approximately June 2014 and to issue our reports no later than December 20,
2014. David Cahill is the engagement partner and is responsible for supervising the engagement and signing the
reports or authorizing another individual to sign them.
Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report
reproduction, word processing, postage, travel, copies, telephone, etc.) except that we agree that our gross fee,
including expenses, will not exceed $50,625 for the audit of the financial statements, assuming no more than four
major federal programs. These fees include preparation of the audited REAC submission. Should there be more
than four major federal programs, our fee for each additional federal program will be $2,850. Our standard hourly
rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to
your audit. Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation. The above fee 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 discuss it with you and arrive at a new fee estimate before we incur the additional costs.
In addition, we will be compensated for any time and expenses, including time and expenses of legal counsel, we
may incur in conducting or responding to discovery requests or participating as a witness or otherwise in any
legal, regulatory, or other proceedings as a result of our Firm's performance of these services. You and your
attorney will receive, if lawful, a copy of every subpoena we are asked to respond to on your behalf and will have
the ability to control the extent of the discovery process to control the costs you may incur.
Should our relationship terminate before our audit procedures are completed, you will be billed for services to the
date of termination. All bills are payable upon receipt. A service charge of 1% per month, which is an annual rate
of 12% will be added to all accounts unpaid 30 days after billing date. If collection action is necessary, expenses
and reasonable attorney's fees will be added to the amount due.
Government Auditing Standards require that we provide you with a copy of our most recent external peer review
report and any letter of comment, and any subsequent peer review reports and letters of comment received during
the period of the contract. Our 2011 peer review report accompanies this letter.
Dispute Resolution
The following procedures shall be used to resolve any disagreement, controversy or claim that may arise out of
any aspect of our services or relationship with you, including this engagement, for any reason ("Dispute").
Specifically, we agree to first mediate.
Mediation
All Disputes between us shall first be submitted to non-binding mediation by written notice ("Mediation Notice")
to the other party. In mediation, we will work with you to resolve any differences voluntarily with the aid of an
impartial mediator. The mediator will be selected by mutual agreement, but if we cannot agree on a mediator, one
shall be designated by the American Arbitration Association ("AAA").
The mediation will be conducted as specified by the mediator and agreed upon by the parties. The parties agree to
discuss their differences in good faith and to attempt, with the assistance of the mediator, to reach an amicable
resolution of the Dispute. Mediation will be conducted with the parties in person in Dubuque, Iowa.
Each party will bear its own costs in the mediation. The fees and expenses of the mediator will be shared equally
by the parties.
Either party may commence suit on a Dispute after the mediator declares an impasse.
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Indemnity
You agree to indemnify Eide Bailly LLP, its partners, affiliates, officers and employees (collectively "Eide
Bailly") against any losses, including settlement payments, judgments, damage awards, punitive or exemplary
damages, and the costs of litigation (including attorneys' fees) associated with a claim brought by a third -party
and that arises out of or is in any way related to the negligence of the City of Dubuque in the performance of this
agreement.
To the fullest extent permitted by law, Eide Bailly LLP shall defend, indemnify, and hold harmless the City from
and against all claims, damages, losses, and expenses, including but not limited to attorney's fees, arising out of or
resulting from Eide Bailly LLP's negligent performance of the Agreement.
Assignments Prohibited
You agree that you will not and may not assign, sell, barter or transfer any legal rights, causes of actions, claims
or Disputes you may have against Eide Bailly, its partners, affiliates, officers and employees, to any other person
or party, or to any trustee, receiver or other third party.
We appreciate the opportunity to be of service to the City of Dubuque 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.
EIDE BAILLY LLP
David R. Cahill, Partner
ACCEPTED BY THE CITY OF DUBUQUE
President/ airman
LL -J
The Mayor
Date
Date d/ 2//('
8
CHERRY
BEKAERTB,
HOLLAND
CERTIFIED PUBLIC,
ACCOUNTANTS fir:;,
CONSULTANTS
System Review Report
To the Partners of
Eide Bailly LLP
and the National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of Eide Bailly
LLP (the firm) applicable to non -SEC issuers in effect for the year ended July 31, 2011. Our peer review
was conducted in accordance with the Standards for Performing and Reporting on Peer Reviews
established by the Peer Review Board of the American Institute of Certified Public Accountants. 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
the Government Auditing Standards, audits of employee benefit plans, and audits performed under
FDICIA.
In our opinion, the system of quality control for the accounting and auditing practice of Eide Bailly LLP
applicable to non -SEC issuers in effect for the year ended July 31, 2011, 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. Eide Bailly LLP has received a peer review rating of pass.
auAN6 i(t14,04
Cherry, Bekaert & Holland, L.L.P.
November 21, 2011
LIQ
9
EideBailly
CPAs & BUSINESS ADVISORS
May 23, 2014
Honorable Mayor and Members of the City Council
City of Dubuque, Iowa
We are engaged to audit the financial statements of the governmental activities, the business -type activities, the
aggregate discretely presented component units, each major fund, and the aggregate remaining fund information
of the City of Dubuque for the year ended June 30, 2014. Professional standards require that we provide you with
the following information related to our audit.
Our Responsibility under U.S. Generally Accepted Auditing Standards and OMB Circular A-133
As stated in our engagement letter dated May 23, 2014, our responsibility, as described by professional standards,
is to express opinions about whether the financial statements prepared by management with your oversight are
fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our
audit of the financial statements does not relieve you or management of your responsibilities.
In planning and performing our audit, we will consider the City's internal control over financial reporting in order
to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and
not to provide assurance on the internal control over financial reporting. We will also consider internal control
over compliance with requirements that could have a direct and material effect on a major federal program in
order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test
and report on internal control over compliance in accordance with OMB Circular A-133.
As part of obtaining reasonable assurance about whether the City's financial statements are free of material
misstatement, we will perform tests of its compliance with certain provisions of laws, regulations, contracts, and
grants, noncompliance with which 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. Also in accordance with OMB Circular A-133, we will examine, on a test basis, evidence about the City's
compliance with the types of compliance requirements described in the "U.S. Office of Management and Budget
(OMB) Circular A-133 Compliance Supplement" applicable to each of its major federal programs for the purpose
of expressing an opinion on the City's compliance with those requirements. While our audit will provide a
reasonable basis for our opinion, it will not provide a legal determination on the City's compliance with those
requirements.
Our responsibility for the supplementary information accompanying the financial statements, as described by
professional standards, is to evaluate the presentation of the supplementary information in relation to the financial
statements as a whole and to report on whether the supplementary information is fairly stated, in all material
respects, in relation to the financial statements as a whole.
Planned Scope and Timing of the Audit
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.
www.oidebailly.com
3999 Pennsylvania Ave., Ste. 100 1 Dubuque, IA 52002-2273 1 T 563.556.1790 1 F 563.557.7842 I EOE
1
Our audit will include obtaining an understanding of the City 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. Material misstatements may result from (1) errors, (2) fraudulent financial
reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable
to the entity or to acts by management or employees acting on behalf of the City. We will generally communicate
our significant findings at the conclusion of the audit. However, some matters could be communicated sooner,
particularly if significant difficulties are encountered during the audit where assistance is needed to overcome the
difficulties or if the difficulties may lead to a modified opinion. We will also communicate any internal control
related matters that are required to be communicated under professional standards.
The financial statements include the Dubuque Metropolitan Area Solid Waste Agency, which we consider to be a
significant component of the financial statements. Consistent with the audit of the financial statements as a whole,
our audit will include obtaining an understanding of the Dubuque Metropolitan Area Solid Waste Agency and its
environment, including internal control, sufficient to assess the risks of material misstatement of the financial
statements of Dubuque Metropolitan Area Solid Waste Agency and to design the nature, timing, and extent of
further audit procedures.
The financial statements include Dubuque Initiatives and Subsidiaries, which we consider to be significant
components of the financial statements. The financial statements of Dubuque Initiatives and Subsidiaries are
audited by other auditors and we will not take responsibility for the audit performed by the other auditors, rather
will refer to their audit in our report. Our decision to refer to the report of the other auditor is based upon the
ability for group management to provide necessary audit evidence with respect to Dubuque Initiatives and
Subsidiaries. Our planned audit procedures with respect to Dubuque Initiatives and Subsidiaries include required
correspondence with the other auditor, obtaining and reading their auditor's report and the related financial
statements, and other procedures as considered necessary.
We expect to begin our audit in June 2014 and expect to issue our report in December 2014.
This information is intended solely for the use of the City Council and management of the City of Dubuque and is
not intended to be and should not be used by anyone other than these specified parties.
EIDE BAILLY LLP
.4 Z.
Dubuque, Iowa
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