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CONTRACT TO AUDIT ACCOUNTS LGC-205 Rev. 9/2019 <br />If an entity is determined to be a component of another government as defined by the group audit <br />standards, the entity’s auditor shall make a good faith effort to comply in a timely manner with the requests of <br />the group auditor in accordance with AU-6 §600.41 - §600.42. <br />This contract contemplates an unmodified opinion being rendered. If during the process of conducting <br />the audit, the Auditor determines that it will not be possible to render an unmodified opinion on the financial <br />statements of the unit, the Auditor shall contact the LGC staff to discuss the circumstances leading to that <br />conclusion as soon as is practical and before the final report is issued. The audit shall include such tests of the <br />accounting records and such other auditing procedures as are considered by the Auditor to be necessary inthe <br />circumstances. Any limitations or restrictions in scope which would lead to a qualification should be fully <br />explained in an attachment to this contract. <br />If this audit engagement is subject to the standards for audit as defined in Government Auditing <br />Standards, 201 revision, issued by the Comptroller General of the United States, then by accepting this <br />engagement, the Auditor warrants that he/she has met the requirements for a peer review and continuing <br />education as specified in Government Auditing Standards. The Auditor agrees to provide a copy of the most <br />recent peer review report to the Governmental Unit(s) and the Secretary of the LGC prior to the execution of an <br />audit contract. Subsequent submissions of the report are required only upon report expiration or upon auditor’s <br />receipt of an updated peer review report. If the audit firm received a peer review rating other than pass, the <br />Auditor shall not contract with the Governmental Unit(s) without first contacting the Secretary of the LGC for a <br />peer review analysis that may result in additional contractual requirements. <br />If the audit engagement is not subject to Government Accounting Standards or if financial statements are not <br />prepared in accordance with U.S. generally accepted accounting principles (GAAP) and fail to include all <br />disclosures required by GAAP, the Auditor shall provide an explanation as to why in an attachment to this <br />contract or in an amendment. <br />6. It is agreed that time is of the essence in this contract. All audits are to be performed and the report of <br />audit submitted to LGC staff within four months of fiscal year end. If it becomes necessary to amend this due <br />date or the audit fee, an amended contract along with a written explanation of the delay shall be submitted to <br />the Secretary of the LGC for approval. <br />7. It is agreed that GAAS include a review of the Governmental Unit’s (Units’) systems of internal control <br />and accounting as same relate to accountability of funds and adherence to budget and law requirements <br />applicable thereto; that the Auditor shall make a written report, which may or may not be a part of the written <br />report of audit, to the Governing Board setting forth his/her findings, together with his recommendations for <br />improvement. That written report shall include all matters defined as “significant deficiencies and material <br />weaknesses” in AU-C 265 of the AICPA Professional Standards (Clarified). The Auditor shall file a copy of that <br />report with the Secretary of the LGC. <br />8. All local government and public authority contracts for audit or audit-related work require the approval <br />of the Secretary of the LGC. This includes annual or special audits, agreed upon procedures related to internal <br />controls, bookkeeping or other assistance necessary to prepare the Governmental Unit’s (Units’) records for <br />audit, financial statement preparation, any finance-related investigations, or any other audit- related work in the <br />State of North Carolina. Approval is not required on contracts and invoices for system improvements and <br />similar services of a non-auditing nature. <br />9. Invoices for services rendered under these contracts shall not be paid by the Governmental Unit(s) <br />until the invoice has been approved by the Secretary of the LGC. (This also includes any progress billings.) <br />[G.S. 159-34 and 115C-447] All invoices for Audit work shall be submitted in PDF format to the Secretary of <br />the LGC for approval. The invoice marked ‘approved ’with approval date shall be returned to <br />Page 2 <br />DocuSign Envelope ID: D2809161-AA0B-4AFA-8A26-418CF7221077