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__ LGC-205 (Rev. 1/1/2008) CONTRACT TO AUDIT ACCOUNTS _ please return this copy to
<br />File in Triplicate.
<br />of Orange County, North Carolina Clerk to the Board's office for PAF
<br />Governmental Unit
<br />On this 11`h day of December , 2008 McGladrey and Pullen LLP
<br />Auditor
<br />. PO Box 2470, Greensboro, NC 27402-2470 ,hereinafter referred to as the Auditor
<br />Mailing Address
<br />and the Commissioners. . of .. Orange County ,hereinafter referred to as the Governmental Unit, agree as follows:
<br />Governing Boazd Governmental Unit
<br />1. The Auditor shall audit all statements and disclosures required by generally accepted accounting principles and additional required legal
<br />statements and disclosures of all funds and/or divisions of the Governmental Unit for the period beginning ,July 1, 2007 ,and ending June 30 ,
<br />2008 . The non-major combining, and individual fund statements and schedules shall be subjected to the auditing procedures applied in the audit
<br />of the basic financial statements and an opinion will be rendered in relation to (as applicable) the governmental activities, the business-type
<br />activities, the aggregate discretely presented component units, each major governmental and enterprise fund, and the aggregate remaining fund
<br />information (nonmajor government and enterprise funds, the internal service fund type, and the fiduciary fund types).
<br />2. At a minimum, the Auditor shall conduct his/her audit and render his/her report in accordance with generally accepted auditing standards. The
<br />Auditor shall perform the audit in accordance with Government Auditing Standards if required by the State Single Audit Implementation Act, as
<br />codified in G.S. 159-34. If required by OMB Circular A-133 and the State Single Audit Implementation Act, the auditor shall perform a Single
<br />Audit. This audit and all associated workpapers may be subject to review by Federal and State agencies in accordance with Federal and State
<br />laws, including the staffs of the Office of State Auditor (OSA) and the LGC. If the audit and/or workpapers are found in this review to be
<br />substandard, the results of the review maybe forwarded to the North Carolina State Board of CPA Examiners.
<br />3. This contract contemplates an unqualified opinion being rendered. If financial statements are not prepared in accordance with generally accepted
<br />accounting principles (GAAP), or the statements fail to include all disclosures required by GAAP, explain that departure from GAAP in the space
<br />below:
<br />4. This contract contemplates an unqualified opinion being rendered. The audit shall include such tests of the accounting records and such other
<br />auditing procedures as are considered by the Auditor to be necessary in the circumstances. Any limitations or restrictions in scope which would
<br />lead to a qualification should be fully explained in an attachment to this contract. The audit will have no scope limitations except:
<br />5. If this audit engagement is subject to the standards for audit as defined in Government Auditing Standards, July 2007 revisions, issued by the
<br />Comptroller General of the United States, then the Auditor warrants by accepting this engagement that he has met the requirements for a peer
<br />review and continuing education as specified in Government Auditing Standards. The Auditor agrees to provide a copy of their most recent peer
<br />review report to the Governmental Unit and the Secretary of the Local Government Commission np ~or to the execution of the audit contract. (See
<br />Item 21.)
<br />6. It is agreed that time is of the essence in this contract. All audits are to be performed and the report of audit submitted by December 31, 2008 .
<br />This amends the original contract requiring the report to be submitted by October 31, 2008. Additional time was required due to restatement of
<br />fiscal year 2007 financial information."
<br />7. It is agreed that generally accepted auditing standards include a review of the Governmental Unit's system of internal control and accounting as
<br />same relates to accountability of funds and adherence to budget and law requirements applicable thereto; that the Auditor will make a written
<br />report, which may or may not be a part of the written report of audit, to the Governing Board setting forth his findings, together with his
<br />recommendations for improvement. That written report must include all matters defined as "significant deficiencies and material weaknesses" in
<br />AU 325 of the AICPA Professional Standards. The Auditor shall file a coroy of that report with the Secretary of the Local Government
<br />Commission .
<br />8. All local government and public authority contracts for annual or special audits, bookkeeping or other assistance necessary to prepare the Unit's
<br />records for audit, financial statement preparation, any finance-related investigations, or any other audit-related work in the State of North
<br />Carolina require the approval of the Secretary of the Local Government Commission. Secretary of the Local Government Commission. (This also
<br />includes any progress billings 1 services rendered under these contracts shall not be paid by the Governmental Unit until the invoice has been
<br />a~roved by the Invoices for [G.S. 159-34 and 115C-447] All invoices should be submitted in triplicate to the Secretary of the Local Government
<br />Commission. The original and one copy will be returned to the Auditor. Approval is not required on contracts and invoices for system
<br />improvements and similar services of anon-auditing nature.
<br />9. In consideration of the satisfactory performance of the provisions of this agreement, the Governmental Unit shall pay to the Auditor, upon
<br />approval by the Secretary of the Local Government Commission, the following fee which includes any cost the Auditor may incur from work
<br />paper or peer reviews or any other quality assurance program required by third parties (Federal and State grantor and oversight agencies or other
<br />organizations) as required under the Federal and State Single Audit Acts:
<br />Year-end bookkeeping assistance - [ For audits subject to Government Auditing Standards, this is limited to bookkeeping services permitted
<br />by revised Independence Standards] None anticipated Anv services ~erfolmed in addition to normal audit procedures will be charged a at
<br />standard rates
<br />Audit -County $88 300 contingent on timely completion of required PBC's Any delays wilt be charged at standard rates. _Amended to add an
<br />additional $5 000 due to restatement of prior ears financancial Anv additional orator programs above (4) four shall be b[l]ed at $4,000
<br />Preparation of the financial statements - $5 000 for the reparation of schedules of property taxes for the Towns of Chapel Hill Carrboro and
<br />Hillsborough .
<br />10 After completing his audit, the Auditor shall submit to the Governing Board a written report of audit. This report shall include, at least,
<br />Management's Discussion and Analysis, the financial statements of the governmental unit and all of its component units and notes thereto
<br />prepared in accordance with generally accepted accounting principles, combining and supplementary information requested by the client or
<br />required for full disclosure under the law, and the Auditor's opinion on the material presented. The Auditor shall furnish the required number of
<br />copies of the report of audit to the Governing Board as soon as practical after the close of the accounting period.
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