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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
Draft External Auditor Engagement Letters for 2025 Audits (Crowe LLP)
end
AGENDA ITEM TYPE:
Discussion
RECOMMENDATION:
Review the proposed draft engagement letters with Crowe LLP for UTA’s 2025 external financial, pension, single audits, and NTD agreed upon procedure.
BACKGROUND:
It is proposed that Crowe LLP be contracted to perform UTA’s external financial audit, single audit, pension audit, and agreed upon procedure for National Transit Database (NTD) compliance. Pending final board approval of the contract with Crowe LLP, Crowe will complete these audits, and subsequently 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
Due to external factors, including audits and legal developments, engagement letters may change over the course of the five-year contract. Each audit year, Crowe LLP will issue an updated engagement letter that reflects changes in the evolving audit and legal environment, as well as any new requirements in effect at the time the letter is issued.
DISCUSSION:
The objective of the audit is to express an opinion on the financial statements. The audit will be conducted in accordance with auditing standards generally accepted in the United States of America, including the financial audit standards 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).
These standards require reasonable, rather than absolute, assurance that the financial statements are free from material misstatement, whether due to error or fraud. They also require UTA to report on the Schedule of Expenditures of Federal Awards, as well as on UTA’s compliance with applicable laws and regulations and its internal controls, as required for a Single Audit. Because of the inherent limitations of both an audit and internal control, there is an unavoidable risk that some material misstatements may not be detected, even when the audit is properly planned and executed in accordance with applicable standards. An audit is not designed to detect errors or fraud that are 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 procedures beyond those agreed upon by UTA. These procedures are performed in accordance with guidance issued by the FTA.
ALTERNATIVES:
UTA could refuse the terms of the engagement letter and seek alternative auditors for the 2025 Audits.
FISCAL IMPACT:
5-year Contract Amount $642,920
ATTACHMENTS:
1) DRAFT Audit Engagement Letter
2) DRAFT NTD Engagement Letter