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HomeMy WebLinkAbout138-22 - Teresa D. Johnson CPA, Inc. - ContractTeresa D. Johnson CPA, Inc. October 13, 2021 Noah Crocker, Finance Director City of Port Orchard 216 Prospect Street Port Orchard, WA 98366 Dear Noah: 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 2021 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 2022; 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. 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 Page! of 10 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. 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 • 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; PHONE 3 6 0. 9 0 4. 0 9 7 2 EMAIL T E R E S A@ T D J C P A. C O M 6 0 1 2 N W 1 6 9'" Street CAS Ridgefield Washington CV 9 8 6 4 2 Page 2 of 10 • 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 and to monitor ongoing activities. 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. Our services will conclude upon the earliest occurrence of one (1) of the following events: • December 31, 2022; • issuance of the deliverable(s) outlined in this engagement letter to you; • as of the date of our closure letter; • written notification by either party that the engagement is terminated; or We expect to begin services on or about February 1, 2022. The timing of our work is dependent on the timely receipt of the information we request from you. Professional Fees and Billings We estimate that our fee for the services outlined above will not exceed $4,180. This will be billed monthly at the standard billing rate of $209 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. Additionally, this fee is dependent on the timely delivery, availability, quality, and completeness of the information you provide to us. If this estimate will be exceeded, we will obtain pre -approval prior to performing additional services. 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. 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. PHONE 360.904.0972 EMAIL T E R E S A@ T D J CPA . C O M 6 0 1 2 NW 3g95 9' ^ Street ( Ridgefield Washington Q6 9 8 6 4 2 Page 3 of 10 Termination and Other Terms We reserve the right to withdraw from the engagement without completing services for any reason, including, but not limited to, non-payment of fees, your failure to comply with the terms of this Agreement, or as we determine professional standards require. If our work is suspended or terminated, you agree that we will not be responsible for your failure to meet governmental and other deadlines, or for any liability, including but not limited to, penalties or interest that may be assessed against you resulting from your failure to meet such deadlines. 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. Electronic Signatures and Counterparts Each party hereto agrees that any electronic signature is intended to authenticate a written signature, shall be valid, and shall have the same force and effect as a manual signature. For purposes hereof, "electronic signature" includes, but is not limited to, a scanned copy of a manual signature, an electronic copy of a manual signature affixed to a document, a signature incorporated into a document utilizing touchscreen capabilities, or a digital signature. This agreement may be executed in one or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same agreement. 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. PHONE 360.904.0972 EMAIL T E R E S A@ T D J C P A. C O M 6 0 1 2 N W 1 6 9'' Street C6 Ridgefield Washington ( 9 8 6 4 2 Page 4 of 10 We appreciate the opportunity to be of service to the 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, Teresa D. Johnson Approved: Rob Putaansuu, Mayor Date: 0 � / � /-Z— PRONK 360.904.0972 ■MAIL T E R E S A@ T D j CPA . C O M 6 0 1 2 N W 1 6 9'" Street C9 Ridgefield W a s h i n g t o n C76 9 8 6 4 2 Page 5 of 10 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 party 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. 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. PHONE 360.904.0972 EMAIL T ER ES A@ T DJ CPA . Co M 6 0 1 2 NW 169h 9' h Street CSS Ridgefield Washington c e 9 8 6 4 2 Page 6 of 10 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. 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 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. PHONE 360.904.0972 EMAIL TER ESA @ T D j CPA . C O M 6 0 1 2 NW 1 6 9 ` Street Cn Ridgefield Washington C 9h642 6 4 2 Page 7 of 10 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 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 indemnify, defend, and hold harmless Teresa D Johnson CPA, Inc and any of its partners, principals, shareholders, officers, directors, members, employees, agents or assigns with respect to any and all claims made by third parties arising from this engagement, regardless of the nature of the claim, and including the negligence of any party, excepting claims arising from the gross negligence or intentional acts of the Teresa D Johnson CPA, Inc. PHONE 360.904.0972 EMAIL T E R E S A@ T DJ CPA. GUM 6 0 1 2 NW 1 6 9'Street CCS Ridgefield Washington CAf 9 8 6 4 2 Page 8 of 10 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 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 party 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. PHONE 3 6 0. 9 0 4. 0 9 7 2 EMAIL T E R E S A@ T D j CPA . C O M 6 0 1 2 NW 1 6 9'Street ct4 R i d g c f i c I d Washington ( 9 9 6 4 2 Page 9 of 10 Potential Impact of COVID-19 on Services We and you acknowledge that governmental authorities may restrict travel and/or the movement of citizens due to the COVID-19 pandemic. In addition, we and you may restrict personnel from travel and onsite work, whether at a client facility or our facility. Accordingly, to the extent that the services described in the Agreement requires or relies on personnel to travel and/or perform work onsite, we and you acknowledge and agree that the performance of such work may be delayed, significantly or indefinitely, or may require modification. We and you agree to provide the other with prompt written notice in the event any of the services described herein must be rescheduled, suspended, or modified. We and you also both acknowledge and agree that any delays or modifications may increase the cost of the services. We will obtain your prior written approval for any increase in the cost of our services that may result from the impact of COVID- 19 on our services. PHONE 360.904.0972 EMAIL T E R E S A@ T D J C P A. C O M 6 0 1 2 N W 1 6 9' h Street e73 Ridgefield Washington (74 9 8 6 4 2 Page 10 of 10