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TO: |
Audit Committee |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
Viola Miller, CFO |
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PRESENTER(S): |
Rob Lamph, Comptroller |
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TITLE:
title
External Auditor Engagement Letters for 2024 Audits (Crowe LLP)
end
AGENDA ITEM TYPE:
Audit - Approval
RECOMMENDATION:
Approve the engagement letters with Crowe LLP for UTA’s 2024 external financial, pension, single audits, and NTD agreed upon procedure.
BACKGROUND:
Crowe LLP has been contracted to perform UTA’s external financial audit, single audit, pension audit, and agreed upon procedure for National Transit Database (NTD) compliance. Upon the completion of these audits, Crowe LLP will issue the following opinion letters:
• Independent Auditor’s Report on the Financial Statements of Utah Transit Authority and Defined Benefit Pension Plan
• Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance
• Independent Auditor’s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance
• Independent Auditor’s Report on Compliance on Internal Controls Over Compliance in Accordance with the State Compliance Audit Guide
General engagement letters were included in the contract approved by the Board on November 4, 2020, but due to external factors facing audits and legal issues, these engagement letter will change over the term of the 5-year contract. Each audit year, Crowe LLP will require an updated engagement letter that addresses changes in the dynamic audit and legal environment and any new requirements in place as of the date of the letter.
DISCUSSION:
The objective of the audit is the expression of an opinion on the financial statements. The audit in accordance with auditing standards generally accepted in the United States of America. These include the standards for financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Those standards require reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement whether caused by error or fraud, and that UTA report on the Schedule of Expenditures of Federal Awards (as noted above), and on UTA’s compliance with laws and regulations and on its internal controls as required for a Single Audit. Because of inherent limitations of an audit and internal control, an unavoidable risk that some material misstatements may not be detected exists, even though the audit is properly planned and performed in accordance with applicable standards. An audit is not designed to detect error or fraud that is immaterial to the financial statements.
The NTD agreed-upon procedures will be performed in accordance with attestation standards established by the American Institute of Certified Public Accountants. There is no obligation to perform any procedures beyond those agreed to by UTA. Those agreed upon procedures are in accordance with guidance from the FTA.
ALTERNATIVES:
UTA could refuse the terms of the engagement letter and seek alternative auditors for the 2024 Audits.
FISCAL IMPACT:
5-year Contract Amount $642,920
ATTACHMENTS:
1) Audit Engagement Letter
2) NTD Engagement Letter