027-24 - Teresa D. Johnson CPA, Inc. - ContractDocuSign Envelope ID: 2ABD3F30-1015-4826-9257-OOFFC7CAEFA1
Contract No. 027-24
Teresa D. Johnson CPA, Inc.
Noah Crocker, Finance Director
City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
Dear Noah:
December 18, 2023
Teresa D Johnson CPA, Inc ("firm," "we," "us," or "our") are pleased to provide the City of Port
Orchard ("you" or "your") with the professional services described below. This letter and the attached
Terms and Conditions and any other attachments incorporated herein (collectively, "Agreement"),
confirms our understanding of the terms and objectives of our engagement and the nature and limitations
of the services we will provide. The engagement between you and our firm will be governed by the
terms of this Agreement.
Engagement Objective and Scope
The objectives of this engagement are to assist you by:
• providing technical accounting assistance as requested by the City as they prepare the 2023 cash
basis financial statements;
• reading client prepared financial statements for the City and completing a Cash basis checklist to
ensure that the financial statements are presented in accordance with BARS (technical review);
• assisting and supporting staff in implementing applicable BARS updates during 2024; and
• being available on an "on -call" basis to answer staff questions during this process.
Our recommendations regarding procedures to be performed and the results of the procedures performed
are dependent upon the accuracy and completeness of the representations and information that we receive
from you. Accordingly, inaccurate, or incomplete representations could result in inaccurate findings or
inappropriate recommendations, and critical recommendations may not be identified.
This engagement is limited to the professional services outlined above.
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CPA Firm Responsibilities
We will perform our services in accordance with the Statement on Standards for Consulting Services
issued by the American Institute of Certified Public Accountants ("AICPA") including the ethical
principles of integrity, objectivity, professional competence, and due care. Such services do not constitute
an audit, review, or any other attestation service as those services are defined in AICPA literature
applicable to such engagements. Accordingly, these services will not result in the issuance of a written
communication to third parties by Teresa D Johnson, CPA Inc regarding financial data or internal controls,
expressing an opinion or conclusion or obtaining or providing any form of assurance.
Our engagement does not include any procedures designed to detect errors, fraud, or theft. Therefore, our
engagement cannot be relied upon to disclose such matters. In addition, we are not responsible for
identifying or communicating deficiencies in your internal controls, unless otherwise specified in the
scope of this Agreement. You are responsible for developing and implementing internal controls
applicable to your operations.
Teresa D Johnson, CPA Inc, in its sole professional judgment, reserves the right to refuse to take any
action that could be construed as making management decisions or performing management functions on
your behalf.
Client Responsibilities
Your Support
We will require the support of your personnel to achieve timely completion of the engagement. Support
includes, but is not limited to, the collection of all relevant documents (paper or electronic) and the
scheduling of interviews and coordination of meetings. Failure to receive such support in a timely manner
may negatively affect our ability to fulfill the scope requirements described above within the agreed -upon
timeframe. Failure to provide such support in a timely manner may negatively affect our ability to fulfill
the requirements in the Engagement Objectives and Scope and Engagement Deliverables within the
agreed -upon timeframe.
Project Management
You will designate a member of your management, who possesses suitable skill, knowledge, or
experience, (the "Project Sponsor") to oversee the services and conduct of this engagement, including
coordination of your resources needed and review of draft deliverables. You authorize us to accept
instructions from the Project Sponsor for this engagement.
The Project Sponsor is responsible for:
• maintaining appropriate oversight of our client service team;
• reviewing and approving the deliverables prepared by our firm during the engagement;
• reporting the results of our services within your reporting structure, including the board of directors
or other governing body; and
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• evaluating observations and recommendations that arise from the services.
You agree that your personnel assigned to this project are responsible for reviewing any draft deliverables
provided by our firm on a timely basis.
Management Functions
Your management agrees to:
• make all management decisions and perform all management functions,
• evaluate the adequacy and results of the services performed;
• accept responsibility for the results of the services, including decisions regarding the
implementation of any recommendations provided by us; and establish and maintain internal
controls relevant to your organization, including monitoring ongoing activity related to their
operation.
You agree that your management and employees are responsible for the accuracy and reliability of
information provided to us, including but not limited to, the proper recording of transactions, the
safekeeping of assets, and the accuracy of the financial statements.
Timing of Engagement
We expect to begin our services upon receipt of this executed Agreement and the information requested,
at a time mutually determined by you and Teresa D Johnson CPA, Inc. We expect to begin services on or
about January 1, 2024. We expect to provide the read of the financial statements to you on approximately
May 25, 2024. The timing of our work is dependent on the timely receipt of the information we request
from you.
Our services will conclude upon the earliest occurrence of one (1) of the following events:
• December 31, 2024;
• issuance of the deliverable(s) outlined in this engagement letter to you;
• as of the date of our closure letter; or
• written notification by either party that the engagement is terminated.
Professional Fees and Billings
We estimate that our fee for the services outlined above will not exceed $4,920. This will be billed
monthly at the standard billing rate of $246 per hour. This fee is based upon the complexity of the work
to be performed, and our professional time, as well as out-of-pocket expenses. In addition, this fee
depends upon the timely delivery, availability, quality, and completeness of the information you provide
to us. You agree that you will deliver all records requested and respond to all inquiries made by our staff
to complete this engagement on a timely basis. If this estimate will be exceeded, we will obtain pre -
approval prior to performing additional services.
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If the information that you provide or we request is not submitted in a timely manner, or it is incomplete
or unusable, we reserve the right to delay services and charge additional fees and expenses.
Termination and Other Terms
We reserve the right to suspend or terminate our work due to non-payment of fees. If our work is
suspended or terminated, you agree that we will not be responsible for your failure to meet governmental
and other deadlines, for penalties or interest that may be assessed against you resulting from your failure
to meet such deadlines, and for any other damages, including, but not limited to consequential, indirect,
lost profits, or punitive damages incurred as a result of the suspension or termination of our service.
If this Agreement is terminated before services are completed, you agree to compensate us for the services
performed and expenses incurred through the effective date of termination.
You may request that we perform additional services not contemplated by this engagement letter. If this
occurs, we will communicate with you regarding the scope and estimated cost of these additional services.
Engagements for additional services may necessitate that we amend this letter or issue a separate
engagement letter to reflect the obligations of both parties. In the absence of any other written
communications from us documenting additional services, our services will be limited to and governed
by the terms of this engagement letter.
Entire Agreement
This engagement letter, including any attachments, encompasses the entire agreement of the parties and
supersedes all previous understandings and agreements between the parties, whether oral or written. Any
modification to the terms of this engagement letter must be made in writing and signed by both parties.
We appreciate the opportunity to be of service to City of Port Orchard. Please date and execute the
enclosed copy of this Agreement and return it to us to acknowledge your acceptance. We will not initiate
services until we receive the executed Agreement.
Very truly yours,
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Teresa D. Johnson
edit ¢d by:
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No-a^lv 'hr�.r_-ker,...FiRance Dir�o
Robert Putaansuu, Mayor
Date: February 27, 2024
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Terms and Conditions Addendum for Teresa D Johnson CPA, Inc
Overview
This addendum to the engagement letter describes our standard terms and conditions ("Terms and
Conditions") related to our provision of services to you. This addendum, and the accompanying
engagement letter, comprise your agreement with us ("Agreement"). If there is any inconsistency
between the engagement letter and this Terms and Conditions Addendum, the engagement letter
will prevail to the extent of the inconsistency.
For the purposes of this Terms and Conditions Addendum, any reference to "firm," "we," "us," or
"our" is a reference to Teresa D Johnson CPA, Inc, and any reference to "you," or "your" is a
reference to the parry or parties that have engaged us to provide services. References to
"Agreement" mean the engagement letter or other written document describing the scope of
services, any other attachments incorporated therein, and this Terms and Conditions Addendum.
Electronic Data Communication and Storage
In the interest of facilitating our services to you, we may send data over the Internet, temporarily
store electronic data via computer software applications hosted remotely on the Internet, or utilize
cloud -based storage. Your confidential electronic data may be transmitted or stored using these
methods. In using these data communication and storage methods, our firm employs measures
designed to maintain data security. We use reasonable efforts to keep such communications and
electronic data secure in accordance with our obligations under applicable laws, regulations, and
professional standards.
You recognize and accept that we have no control over the unauthorized interception or breach of
any communications or electronic data once it has been transmitted or if it has been subject to
unauthorized access while stored, notwithstanding all reasonable security measures employed by
us. You consent to our use of these electronic devices and applications during this engagement.
If you transmit your confidential information to us in a manner other than via a secure portal, you
accept responsibility for any and all unauthorized access to your confidential information. If you
request that we transmit confidential information to you in a manner other than via a secure portal,
you agree that we are not responsible for any liability associated therewith, including but not
limited to, (a) any loss or damage of any nature, whether direct or indirect, that may arise as a
result of our sending confidential information in a manner other than a secure portal, and (b) any
damages arising as a result of any virus being passed on or with, or arising from any alteration of,
any email message.
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360.904.0972
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T E R E S A@ T D J C P A. C O M
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Newsletters and Similar Communications
We may send newsletters, emails, explanations of technical developments or similar
communications to you. These communications are of a general nature and should not be construed
as professional advice. We may not send all such communications to you. These communications
do not constitute a client relationship with you, nor do they constitute advice or an undertaking on
our part to monitor issues for you.
Independent Contractor
When providing services to your company, we will be functioning as an independent contractor
and in no event will we or any of our employees be an officer of you, nor will our relationship be
that of joint venturers, partners, employer and employee, principal and agent, or any similar
relationship giving rise to a fiduciary duty to you.
Our obligations under this agreement are solely obligations of Teresa D Johnson CPA, Inc, and no
partner, principal, employee or agent of Teresa D Johnson CPA, Inc shall be subjected to any
personal liability whatsoever to you or any person or entity.
Disclaimer of Legal and Investment Advice
Our services under this Agreement do not constitute legal or investment advice unless specifically
engaged to provide investment advice in the Engagement Objective and Scope section of this
Agreement. We recommend that you retain legal counsel and investment advisors to provide such
advice.
Referrals
In the course of providing services to you, you may request referrals to products or professionals
such as attorneys, brokers, or investment advisors. We may identify professional(s) or product(s)
for your consideration. However, you are responsible for evaluating, selecting, and retaining any
professional or product and determining if the professional or product meets your needs. You agree
that we will not oversee the activities of and have no responsibility for the work product of any
professional or the suitability of any product we refer to you or that you separately retain. Further,
we are not responsible for any services we perform that fail to meet the intended outcomes as a
result of relying on the services of other professionals or products you may retain.
Brokerage or Investment Advisory Statements
If you provide our firm with copies of brokerage (or investment advisory) statements and/or read-
only access to your accounts, we will use the information solely for the purpose described in the
Engagement Objective and Scope section of the engagement letter. We will rely on the accuracy
of the information provided in the statements and will not undertake any action to verify this
information. We will not monitor transactions, investment activity, provide investment advice, or
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360.904.0972
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T E R E S A@ T D J C P A. C O M
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supervise the actions of the entity or individuals entering into transactions or investment activities
on your behalf. We recommend that you receive and carefully review all statements upon receipt
and direct any questions regarding account activity to your banker, broker or investment advisor.
Limitations on Oral and Email Communications
We may discuss with you our views regarding the treatment of certain items or decisions you may
encounter. We may also provide you with information in an email. Any advice or information
delivered orally or in an email (rather than through a memorandum delivered as an email
attachment) will be based upon limited research and a limited discussion and analysis of the
underlying facts. Additional research or a more complete review of the facts may affect our
analysis and conclusions.
Due to these limitations and the related risks, it may or may not be appropriate to proceed with a
decision solely on the basis of any oral or email communication from us. You accept all
responsibility, except to the extent caused by our gross negligence or willful misconduct, for any
liability, including but not limited to additional tax, penalties or interest resulting from your
decision (i) not to have us perform the research and analysis necessary to reach a more definitive
conclusion and (ii) to instead rely on an oral or email communication. The limitation in this
paragraph will not apply to an item of written advice that is a deliverable of a separate engagement.
If you wish to engage us to provide formal advice on a matter on which we have communicated
orally or by email, we will confirm this service in a separate engagement letter.
Management Responsibilities
While Teresa D Johnson CPA, Inc can provide assistance and recommendations, you are
responsible for management decisions and functions, and for designating an individual with
suitable skill, knowledge or experience to oversee any services that Teresa D Johnson CPA, Inc
provides. You are responsible for evaluating the adequacy and results of the services performed
and accepting responsibility for such services. You are ultimately responsible for establishing and
maintaining internal controls, including monitoring ongoing activities.
Conflicts of Interest
If we, in our sole discretion, believe a conflict has arisen affecting our ability to deliver services to
you in accordance with either the ethical standards of our firm or the ethical standards of our
profession, we may be required to suspend or terminate our services without issuing our work
product.
Mediation
If a dispute arises out of or relates to the Agreement, including the scope of services contained
herein, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties
agree first to try to settle the dispute by mediation administered by the American Arbitration
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T E R E S A@ T D J C P A. C O M
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Association ("AAA") under the AAA Accounting and Related Services Arbitration Rules and
Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution
procedure. The mediator will be selected by mutual agreement of the parties. If the parties cannot
agree on a mediator, a mediator shall be designated by the AAA.
The mediation will be treated as a settlement discussion and, therefore, all discussions during the
mediation will be confidential. The mediator may not testify for either party in any later proceeding
related to the dispute. No recording or transcript shall be made of the mediation proceedings. The
costs of any mediation proceedings shall be shared equally by all parties. Any costs of legal
representation shall be borne by the hiring party.
Indemnification
You agree to defend, indemnify, and hold us, including our shareholders, directors, officers,
employees, agents, and representatives harmless from and against any and all damages, claims,
losses, fees, assessments, interest charges, or penalties, including reasonable attorneys', incurred
by or charges to us as a result of any claim, cause of action, or assessment whatsoever arising out
of or related to, directly or indirectly, your misrepresentations to us, your withholding or
concealment of information from us, or your breach of the terms of this Agreement, excepting only
claims arising out of the gross negligence or intentional acts of us. The provisions of this paragraph
shall apply regardless of the nature of the claim.
Insurance
Teresa D Johnson, CPA Inc shall, during the term of the engagement and for 3 years after
termination of same by either you or us, maintain in full force and effect, accountants professional
liability insurance coverage from an insurance carrier or carriers licensed to conduct business in
the state of Washington. As of the policy effective date, such insurance carrier(s) shall be rated A -
(Excellent), by A.M. Best with a Financial Size Category of Class VII or greater. Premiums for
said insurance policy shall be paid by Teresa D Johnson CPA, Inc.
Upon your written request, Teresa D Johnson CPA, Inc shall furnish certificates of insurance for
the required insurance coverage. Such certificate of insurance shall indicate the minimum limits
of liability per claim and in the aggregate as required by you.
Proprietary Information
You acknowledge that proprietary information, documents, materials, management techniques and
other intellectual property are a material source of the services we perform and were developed
prior to our association with you. Any new forms, software, documents or intellectual property we
develop during this engagement for your use shall belong to us, and you shall have the limited
right to use them solely within your business. All reports, templates, manuals, forms, checklists,
questionnaires, letters, agreements and other documents which we make available to you are
confidential and proprietary to us. Neither you, nor any of your agents, will copy, electronically
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T E R E S A@ T D J C P A. C O M
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store, reproduce or make available to anyone other than your personnel, any such documents. This
provision will apply to all materials whether in digital, "hard copy" format or other medium.
Force Majeure
Neither parry shall be held liable for any delays resulting from circumstances or causes beyond
our reasonable control, including, without limitation, fire or other casualty, act of God, strike or
labor dispute, war or other violence, epidemics or pandemics as defined by The Centers for Disease
Control and Prevention, or any law, order or requirement of any governmental agency or authority.
However, no Force Majeure event shall excuse the client of any obligation to pay any outstanding
invoice or fee or from any indemnification obligation under this Agreement.
Assignment
All parties acknowledge and agree that the terms and conditions of this Agreement shall be binding
upon and inure to the parties' successors and assigns, subject to applicable laws and regulations.
Severability
If any portion of this Agreement is deemed invalid or unenforceable, said finding shall not operate
to invalidate the remainder of the terms set forth in this Agreement.
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