HomeMy WebLinkAboutC27545 - 1yr Xtnsn - Auditing Services Contract No. C27545
CITY OF PALM DESERT
�
FINANCE DEPARTMENT ��� `���
STAFF REPORT
Request: Authorize an extension of contract with White Nelson Diehl Evans,
LLP, to perform auditing services for one additional year
Submitted By: Paul S. Gibson, Finance Director
Date: April 24, 2014
Contents: Proposal for Services
Recommendation
By Minute Motion, that the City Council authorize the extension of contract
with White Nelson Diehl Evans, LLP to perform auditing services for one
additional year.
Committee Recommendation
This item was discussed at the March 25 meeting of the Audit, Investment and Finance
Committee, and it was recommended that Council approve the contract extension.
Background
On March 27, 2008, the City Council approved the selection of White Nelson Diehl
Evans, LLP as independent auditors for the fiscal years ended June 30, 2008 through
June 30, 2014. This is the final year of the existing seven-year contract. Their services
include auditing the City, the Housing Authority's apartment complexes, Desert Willow
and the City's office complex. In addition, they perform reviews on Waste Management,
Time Warner Cable, and various hotels on behalf of the City. Staff finds that White
Nelson Diehl Evans, LLP has a professional staff that is knowledgeable in the
accounting arena and feels comfortable in calling them when an accounting question
arises.
In the year ahead, the City is switching its comprehensive enterprise software suite,
which in the process will change our current processing procedures. Staff feels it is
appropriate to retain the independent auditor who is already familiar with the City's
procedures. In addition, new accounting pronouncements which include pension
reporting will be required. Therefore, staff believes that our current auditor is best suited
to make the transition for the City since they know how the City's financials function.
Staff will go out to bid for the fiscal year after 2015.
G:\Finance\Niamh Ortega\Staff ReportsWuditors\SR-Auditor Contract Extension 042414.Doc
Contract No. C27545
Staff Report
Authorization to extend contract with White Nelson Diehl Evans for one additional year
April 24, 2014
Page 2 of 2
Staff requests City Council authorize an extension of contract with White Nelson Diehl
Evans, LLP to perform auditing services as the City of Palm Desert's auditors for one
additional fiscal year ending June 30, 2015.
Fiscal Impact
Auditing services are budgeted each year, and the contract extension is based on last
year's rate plus a reasonable cost of living adjustment. For the upcoming year, the State
has imposed additional requirements relative to reporting for the former Redevelopment
Agency, resulting in a slight increase in the cost of the audit. Otherwise, extending the
contract with White Nelson Diehl Evans, LLP does not have a direct fiscal impact the
budget.
Submitted by:
CITY COUNCILAC ION
� APPROVF.D DF,NIi?D
RECEIVED OTHrR
Paul S. Gibson, Finance Director
MEETING DATE " -�t'�
Approved by: AYF,S: ' `� � -, � T �_
NOES:�1���-
ABSI:NT: ti��P ----
AI3STAIN: L
VCKIFIED BY: �
ohn M. Wohlmuth, City Manager Original on File with City Cler•t:'s C ice
G:\Finance\Niamh Ortega\Staff ReportsWuditors\SR-auditor contract extension 042414.doc
Contract No. C27545
. �
March 21, 2014
Mr. Paul Gibson
Director of Finance
City of Palm Desert
73-510 Fred Waring Drive
Palm Desert, CA 92260
Dcar Mr. Gibson:
We are pleased to confirm our understanding of the services we are to provide the City of Palm Desert,
the Successor Agency to the Palm Desert Redevelopment Agency, Palm Desert Housing Authority and
the Palm Desert Recreational Facilities Corporation (the City) as of and for the year ending
June 30, 2015. We will audit the financial statements of the governmental activities, the business-type
activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
information, which collectively comprise the basic financial statements, of the City as of and for the
year ending June 30, 2015. Accounting standards gcnerally accepted in the United States of�merica
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 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 suffiicient 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 Uiscussion and Analysis.
2) Budgetary Comparison Schedules - General and Major Special Revenue Funds.
3) Schedules of Funding Progress - CaIPERS Defined Benefit Plan and Other Postemployment
E3enefit Plan.
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Contract No. C27545
Mr. Paul Gibson, Director of Finance
City of Palin Desert
March 21, 2014
Page 2
We have also been engaged to report on supplementary information other than RS[ also 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) Combining and individual other governmental fund financial statements.
2) Schedule of expenditures of federal awards.
�f'he following other information accompanying the basic 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 Section.
Audit Objectives:
']'he 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 accounting principles generally
accepted in the United States of America and to report on the fairness of the supplementary
information referred to in the second paragraph when considered in relation to the financial statements
taken 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
cffect on the financial statements in accordance with Government Auditin�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 OMI3 Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations.
"1'he reports on internal control and compliance will each include a paragraph that states that the
purpose of the report is solely to describe (1) the scope of testing of internal control over financial
reporting and compliance and the result of that testing and not to provide an opinion on the
effectiveness of internal control over financial reporting or on compliance, (2) the scope of testing
internal control over compliance for major programs and major program compliance and the result of
that testing and to provide an opinion on compliance but not to provide an opinion on the effectiveness
of internal control over compliance, and (3) that the report is an integral part of an audit performed in
accordance with Government Auditing, Standards in considering internal control over financial
reporting and compliance and OMB Circular A-133 in considering internal control over compliance
and major program compliance. The paragraph will also state that the report is not suitable for any
other purpose.
Contract No. C27545
Mr. Paul Gibson, Director of Finance
City of Palm Desert
March 21, 2014
Page 3
Audit Objectives (Continued):
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 Auditin� 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 and to render the required reports. 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 Sing�le Audit compliance opinions are other than
unmoditied, 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 to issue a report as a result of this engagement.
Management Responsibilities:
Management is responsible for the basic 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 government award programs and understanding and
complying with the compliance requirements, and for preparation of the schedule of expenditures of
federal awards in aecordance with the requirements of OMB Circular A-133. As part of the audit, we
will assist with preparation of your financial statements, schedule of expenditures of federal awards,
and related notes. You will be required to acknowledge in the written representation letter our
assistance with preparation of the financial statements and 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.
You agree to assume all management responsibilities for any nonaudit services we provide: oversee the
services by designating an individual, preferably from senior management, who possess suitable skill,
knowledge, or experience: evaluate the adequacy and results of the services: and accept responsibility
for them.
Management is responsible for 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 and that there is reasonable assurance that government
programs are administered in compliance with compliance requirements. You are also responsible for
the selection and application of accounting principlcs; 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 ensuring that management is reliable and financial information is reliable and properly
recorded. 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 stateinents, (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.
Contract No. C27545
Mr. Paul Gibson, Director of Finance
City of Paln� Desert
March 21, 2014
Page 4
Management Responsibilities (Continued):
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 written 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 or illegal acts affecting the government
involving (1) management, (2) employees who have significant roles in internal control, and (3) others
where the fraud or illegal acts 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. (n addition, you are responsible for identifying and ensuring that the City
complies with applicable laws, regulations, contracts, agreements, and grants. Additionally, as required
by OMB Circular A-133, it is management's responsibility to follow up and take corrective action on
rcported 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.
You are responsible for preparation of the schedule of expenditures of federal awards in conformity
with OMI3 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 make the audited financial statements readily
available to intended users of the schedule of expenditures of federal awards no later than the date the
schcdule of expenditures of federal awards is issued with our report thereon. Your responsibilities
include acknowledging to us in the written representation letter that (a) you are responsible for
presentation of the schedule of expenditures of federal awards in accordance with
OMi3 Circular A-133; (b) that you believe the schedule of expenditures of federa( awards, including its
form and content, is fairly presented in accordance with OMB Circular A-133; (c) that 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 (d) you have disclosed to us any significant assumptions
or interpretations underlying the measurement or prescntation 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 (GAAP).
You agree to include our report on the supplementary information in any document that contains and
indicatcs that we have reported on the supplementary information. You also agree to make the audited
linancial statements readily available to users of the supplementary information no later than the date
thc supplementary information is issued with our report thereon. Your responsibilities include
acknowledging to us in the written representation letter that (a) you are responsible for presentation of
the supplementary information in accordance with GAAP; (b) that you believe the supplementary
information, including its form and content, is fairly presented in accordance with GAAP; (c) that the
methods of ineasurement or presentation have not changed from those used in the prior period (or, if
they have changed, the reasons for such changes); and (d) you have disclosed to us any significant
assumptions or interpretations underlying the measurement or presentation of the supplementary
information.
Contract No. C27545
Mr. Paul Gibson, Director of Finance
City of Palm Desert
March 21, 2014
Page 5
Managcment Responsibilities (Continued):
Management is responsible for establishing and maintaining 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 the electronic dissemination of audited financial statements, including financial
statements published electronically on your website, you understand that electronic sites are a means to
distribute information and, therefore, we are not required to read the information contained in these
sites or to consider the consistency of other information in the electronic site with the original
document.
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 (i) errors, (2) fraudulent financial
reportin�, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are
attributable to the City or to acts by management or employees acting on behalf of the City. 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 Auditin� Standards. [n 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 financial 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 responsibi(ity 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.
Contract No. C27545
Mr. Paul Gibson, Director of Finance
City of Palm Desert
March 21, 2014
Page 6
Audit Procedures - General (Continued):
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, 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 also require certain written representations from
you about the financial statements and related matters.
Audit Yrocedures - Internal Controls:
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. 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 OMF3 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 noneompliance with compliance requirements applicable to each ��ajor 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 inaterial weaknesses. However, during the audit, we will coinmunicate to management and those
charged with governance internal control related matters that are required to be communicated under
A1CPA professional standards, Government Auditin� Standards, and OMB Circular A-133.
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
proccdures 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 Auditin� Standards.
OMf3 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 or
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
eompliance issued pursuant to OMB Circular A-133.
Contract No. C27545
Mr. Paul Gibson, Director of Finance
City of Palm Desert
March 21, 2014
Page 7
Audit Administration, Fees and Other:
Noted below is a listing of work required by City staff to assist in the audit.
1. Technical assistance in familiarizing our staff with:
• The flow of information through the various departments and accounting systeins.
• Reports generated by your accounting system.
• �'he system of internal controls.
• Controls established to monitor compliance with federal grants.
2. Preparation of trial balances for all funds, after posting of all year end journal entries.
3. Preparation of schedules supporting all major balance sheet accounts, and selected revenue and
expenditure accounts.
4. "['yping of all confirmation requests.
5. Pulling and refiling of all supporting documents required for audit verification.
6. If applicable, assistance with the preparation oC the CAFR and notes to the financial statements,
including:
a. Determination of major funds.
b. Determination of general and program revenues and allocation of pro�ram revenues to:
l. charges for services,
2. operating grants and contributions, and
3. capital grants and contributions.
c. Determining components of net position into net investment in capital assets, restricted and
unrestricted position.
d. Assistance in determining the amounts to be reported (1) in the Reconciliation of the Balance
Sheet of Governmental Funds to the Statement ofNet Position and (2) in the Reconciliation of
the Statement of Revenues, Expenditures and Changes in Fund Balances of C;overnmental
Funds to the Statement ofActivities and
7. Yreparation of the management's discussion and analysis, transmittal letter and all statistical tables
for thc CAFR.
Contract No. C27545
Mr. Paul Gibson, Director of Finance
City of Palm Desert
March 21, 2014
Page 8
Audit Administration, Fees and Other (Continued):
Our maximum annual fees for the year ending June 30, 2015 are as follows:
City:
Audit (1) $ 38,209
Financial Statement Preparation 5,731
Recreation Facilities Corporation:
Audit 7,761
Financial Statement Preparation 2,508
Single Audit 5,254
Gann Limit Verification 358
Redevelopment Agency/Successor Agency -Audit:
Palm Desert Housing Authority (2) 4,120
Palm Uesert HousingAuthority (3) 6,180
Audit of Successor Agency's transactions for
inclusion in the City's CAFR (4) g,387
SB341 Requirement for financial and co�npliance
audit of the Low and Moderate Income Flousing Asset Fund 5,000
8 508
1. Incl��des audit of the financial records at Desert Willow Golf Course.
2. Audit of the Palm Desert Housing Authority accounting records located in Lodi, California.
3. Compliance testing for 100 tenant files of the Palm Desert Housing Authority.
4. Audit of the activity of the Successor Agency's financial transactions for fiscal year 2015 for
inclusion in the CAFR of the City of Palin Desert, and additional audit work for the separate audit
of the Successor Agency.
I'he maximum annual fees stipulated herein contemplate that conditions satisfactory to the normal
progress and completion of the examination will be encountered and the City accounting personnel
will furnish the agreed upon assistance in connection with the audit. However, if unusual
circumstances are encountered which make it necessary for us to do additional work; we shall report
such conditions to the responsible City officials and provide the City with an estimate of the additional
accounting fees involved. You may terminate our services or we may withdraw from this engagement
at any time. Any disputes arising under this agreement shall be mediated under the rules of the
American Arbitration Association.
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 fndings, auditors' 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 auditors' 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.
Contract No. C27545
Mr. Paul Gibson, Uirector of Finance
CiCy of Palm Desert
March 21, 2014
Page 9
Audit Administration, Fees and Other(Continued):
"I'he audit documentation for this engagement is the property of White Nelson Diehl Evans LI,P and
constitutes confidential information. However, we may be requested to make certain audit
documentation available to grantor agencies pursuant to authority given to it by law or regulation. If
requested, access to such audit documentation will be provided under the supervision of our personnel.
Furthermore, upon request, we may provide photocopies of selected audit documentation to the grantor
agencies. The grantor agencies may intend, or decide, to distribute the photocopies or information
contained therein to others, including other governmental agencies.
In accordance with our firm's current record retention policy, all of your original records will be
returned to you at the conclusion of this engagement. Our audit documentation files will be kept for a
period of seven years after the issuance of the audit report. All other files will be kept for as long as
you retain us as your accountants. However, upon termination of our service, all records will be
destroyed after a period of seven years. Physical deterioration or catastrophic events may further
shorten the life of these records. The working papers and files of our firm are not a substitute for your
original rccords.
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 most recent peer review accompanies this
letter.
We appreciate the opportunity to be of service to the City of Pal�n Desert 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.
Very truly yours,
WHI'i'E NELSON� DIEHL EVANS LLP
✓v �-_ � ��'�-
Nitin P. Fatel, CPA
L:ngageinent Partner
RrSPONSE:
This letter correctly sets forth the understanding
of the City of Palm Descrt. �
By
�I,itle
Date
Heidenreich & Heidenreich, C'PAs, YL1,G
10201 S.5151 Street,Suite ti170
Phoenix,AZ 85044
(480)704-6301 fax 785-4619
System Review Report
August 3, 2012
To the Owners of
White Nelson Diehl Evans, LLP
and the Peer Review Committee of the CA Society of CPAs
We have reviewed the system of quality control for the accounting and auditing practice of White
Nelson Diehl Evans, LLP (the firm) in effect for the year ended March 31, 2012. 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, timitations 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 Sfandards and audits of employee benefit plans.
In our opinion, the system of quality control for the accounting and auditing practice of White Nelson
Diehl Evans, LLP in effect for the year ended March 31, 2012, 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. White Nelson Diehl Evans, LLP has received a peer review rating of
pass.
Jl�eMae�n�ei�c4�i, �' Jl.ei�v,nrt�,a.i.ch.
Heidenreich & Heidenreich, CPAs, PLLC