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<br />Identifying and ensuring that the City complies with laws, regulations, contracts, and <br />agreements (including grant agreements), is the responsibility of management. As part of <br />obtaining reasonable assurance about whether the financial statements are free of material <br />misstatements, the Auditor will perform tests of the City's compliance with applicable laws <br />and regulations and the provisions of contracts and agreements, including grant agreements. <br />However, the objective of their audit will not be to provide an opinion on overall compliance <br />and they will not express such an opinion in their report pursuant to Government Auditing <br />Standards. <br /> <br />The audit will be conducted in accordance with the standards referred to in the second <br />paragraph. OMB Circular A- I 33 and the Florida Single Audit Act requires that the Auditor <br />plan and perform the audit to obtain reasonable assurance about whether the auditee has <br />complied with applicable laws and regulations and the provisions of contracts and grant <br />agreements applicable to major programs. Procedures will consist of the applicable procedures <br />described in the OMB's and Florida's compliance supplements. The purpose of these <br />procedures will be to express an opinion on the City's compliance with requirements applicable <br />to major federal programs and state projects. <br /> <br />The Auditor's procedures will include tests of documentary evidence supporting the <br />transactions recorded in the accounts, and may include tests of the physical existence of <br />inventories, and direct confirmation of receivables and certain other assets and liabilities by <br />correspondence with selected individuals, creditors, and financial institutions. The Auditor will <br />request written representations from attorneys as part of the engagement, and they may bill the <br />City for responding to this inquiry. At the conclusion of the audit, the Auditor will also require <br />certain written representations from management about the financial statements and related <br />matters. <br /> <br />An audit includes examining, on a test basis, evidence supporting the amounts and disclosures <br />in the financial statements; therefore, these audits will involve judgment about the number of <br />transactions to be examined and the areas to be tested. The Auditor will plan and perform the <br />audit to obtain reasonable rather than absolute assurance about whether the financial statements <br />are free of material misstatement, whether from (I) errors, (2) fraudulent financial reporting, (3) <br />misappropriation of assets, or (4) violations of laws or governmental regulations that are <br />attributable to the entity or to acts by management or employees acting on behalf of the entity. <br />Because the determination of abuse is subjective, Government Auditing Standards do not expect <br />auditors to provide reasonable assurance of detecting abuse. As required by the Single Audit <br />Act Amendments of 1996 and OMB Circular A-133 and the Florida Single Audit Act, the audits <br />will include tests of transactions related to federal award programs and state financial assistance <br />projects for compliance with applicable laws and regulations and the provisions of contracts and <br />grant agreements. Because of the concept of reasonable assurance and because the Auditor will <br />not perform a detailed examination of all transactions, there is a risk that a material <br />misstatement may exist and not be detected by us. In addition, an audit is not designed to detect <br />errors, fraud, or other illegal acts that are immaterial to the financial statements or to major <br />programs or state projects. However, the Auditor will inform the governing body or audit <br />committee of any material errors and any fraudulent financial reporting or misappropriation of <br /> <br />4 <br />