HomeMy WebLinkAboutTeresa D Johnson CPATeresa D. Johnson CPA, Inc.
July 7, 2022
Loretta Swanson, Director
Mason County Public Works/Utilities and Waste Management
411 North 5th Street # 1
Shelton, WA 98584
Dear Loretta:
Teresa D Johnson CPA, Inc ("firm," "we," "us," or "our") is pleased to provide the Mason County
Public Works ("you" or "your" or "PW") with the professional services described below. This letter,
and the attached Terms and Conditions Addendum and any other attachments incorporated herein
(collectively, "Agreement"), confirm our understanding of the terms and objectives of our engagement
and the nature and limitations of the services we will provide. The engagement between you and our
firm will be governed by the terms of this Agreement.
Engagement Objective and Scope
Consulting Services
We will provide technical accounting assistance to the Mason County Public Works finance department.
This may relate to answering technical accounting questions, aiding with internal controls or other
manners. More specifically, some of the accounting assistance we will provide is as follows:
• Review and reconcile capital assets — special emphasis on utility assets
• Create framework for asset processing.
• Develop Utility and ER&R rates and improve monitoring process.
• Set up CAMS to better track maintenance management plan.
• Look at processes in Munis to see if dual accounting systems can be eliminated.
• Ensure procedures are in place to accurately and efficiently complete year end reporting
• Assist with development of 2023 department budgets
The performance of "other accounting services" is deemed to be "nonattest services" in our professional
standards.
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CPA Firm Responsibilities
We will conduct our engagement in accordance with the Statements on Standards for Accounting and
Review Services ("SSARS") issued by the American Institute of Certified Public Accountants including
the ethical principles of integrity, objectivity, professional competence, and due care. Such services do
not constitute an audit, review, or any other attestation service as those services are defined in AICPA
literature applicable to such engagements. Accordingly, these services will not result in the issuance of a
written communication to third parties by Teresa D Johnson, CPA Inc regarding financial data or internal
controls, expressing an opinion or conclusion or obtaining or providing any form of assurance.
Our engagement does not include any procedures designed to detect errors, fraud, or theft. Therefore, our
engagement cannot be relied upon to disclose such matters. In addition, we are not responsible for
identifying or communicating deficiencies in your internal controls, unless otherwise specified in the
scope of this Agreement. You are responsible for developing and implementing internal controls
applicable to your operations.
Teresa D Johnson, CPA Inc, in its sole professional judgment, reserves the right to refuse to take any
action that could be construed as making management decisions or performing management functions on
your behalf.
Engagement Deliverables
We anticipate issuing the following deliverables in connection with our services:
• Capital asset reconciliation documents
• 2023 Budget schedules
• Proposed Utility and ER&R rates
We will provide draft deliverables to you for review and comment, prior to final delivery.
The deliverable(s) presented as part of this engagement are solely for the internal use of your management
and the board of directors. It is not to be distributed to third parties other than those noted herein, in whole
or in part, or used for any other purpose.
After we provide you with the deliverables, we shall have no obligation to update or revise the
observations or conclusions reflected in our deliverable(s), if new information, future events or changes
in applicable laws and regulations affect the observations or conclusions reflected in those deliverables.
You understand and agree that our services may include advice and recommendations based upon our
knowledge, training and experience, but at all times, the decisions related to implementation of the advice
and recommendations are solely your responsibility. We encourage you to consider our recommendations
and advice and implement what you believe is best for your company. If you ask us to assist you in
implementing any advice of recommendation, we will confirm this representation in a separate
engagement letter.
If, for any reason, we are unable to complete the engagement, we will not issue a deliverable(s).
PHONE
360.904.0972
EMAIL
T E R E S A@ T D J C P A. C O M1
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Client Responsibilities
Your Support
We require the support of your personnel in order to achieve timely completion of the engagement.
Support includes, but is not limited to, the collection of all relevant documents (paper or electronic) and
the scheduling of interviews and coordination of meetings. Failure to receive such support in a timely
manner may negatively affect our ability to fulfill the scope requirements described above within the
agreed -upon timeframe. Failure to provide such support in a timely manner may negatively affect our
ability to fulfill the requirements in the Engagement Objectives and Scope and Engagement Deliverables
within the agreed -upon timeframe.
Project Management
You will designate a member of your management who possesses suitable skill, knowledge, or experience
(the "Project Sponsor") to oversee the services and conduct of this engagement, including coordination of
your resources needed and review of draft deliverables. You authorize us to accept instructions from the
Project Sponsor for this engagement.
The Project Sponsor is responsible for:
• maintaining appropriate oversight of our client service team;
• reviewing and approving the deliverables prepared by our firm during the engagement;
• reporting the results of our services within your reporting structure, including the board of directors
or other governing body; and
• evaluating observations and recommendations that arise from the services.
You agree that your personnel assigned to this project are responsible for reviewing any draft deliverables
provided by our firm on a timely basis.
Management Functions
Your management agrees to:
• make all management decisions and perform all management functions
• evaluate the adequacy and results of the services performed;
• accept responsibility for the results of the services, including decisions regarding the
implementation of any recommendations provided by us; and establish and maintain internal
controls relevant to your organization, including monitoring ongoing activity related to their
operation.
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T E R E S A@ T D J C P A. C O M
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You agree that your management and employees are responsible for the accuracy and reliability of
information provided to us, including but not limited to, the proper recording of transactions, the
safekeeping of assets, and the accuracy of the financial statements.
Timing of Engagement
We expect to begin all services, as described in the Engagement Objective and Scope, approximately June
13, 2022. The timing of our work is dependent on the timely receipt of the information we request from
you. Additionally, our consulting and monthly preparation services will be available until December 31,
2022.
Professional Fee
We estimate that our fee for the services outlined above will not exceed $81,510. This will be billed
monthly at the standard billing rate of $209 per hour. We expect to provide services at 10 to 20 hours
weekly. Monthly services are quoted thru December 31, 2022 and an amendment to this Agreement
may be required to extend monthly services beyond this date. This fee is based upon the complexity of
the work to be performed and out professional time, as well as out-of-pocket expenses. Additionally,
this fee is dependent on the timely delivery, availability, quality, and completeness of the information
you provide to us. You agree that you will deliver all records requested and respond to all inquiries
made by our staff to complete this engagement on a timely basis. If this estimate will be exceeded, we
will obtain pre -approval prior to performing additional services and the billing rate of $209 per hour will
remain the same.
Termination and Other Terms
We reserve the right to withdraw from the engagement without completing services for any reason,
including, but not limited to, non-payment of fees, your failure to comply with the terms of this
Agreement, or as we determine professional standards require. If our work is suspended or terminated,
you agree that we will not be responsible for your failure to meet governmental and other deadlines, or
for any liability, including but not limited to, penalties or interest that may be assessed against you
resulting from your failure to meet such deadlines. Further, either party may terminate with a 30-day
written notice.
If this Agreement is terminated before services are completed, you agree to compensate us for the services
performed and expenses incurred through the effective date of termination.
You may request that we perform additional services not contemplated by this engagement letter. If this
occurs, we will communicate with you regarding the scope and estimated cost of these additional services.
Engagements for additional services may necessitate that we amend this letter or issue a separate
engagement letter to reflect the obligations of both parties. In the absence of any other written
communications from us documenting additional services, our services will be limited to and governed
by the terms of this engagement letter.
PHONE
3 6 0. 9 0 4. 0 9 7 2
EMAIL
T E R E S A@ T D J C P A. C O M
6 0 1 2 NW l 6 9', Street 03 Ridgefield Washington03 9 8 6 4 2
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Electronic Signatures and Counterparts
Each party hereto agrees that any electronic signature is intended to authenticate a written signature, shall
be valid, and shall have the same force and effect as a manual signature. For purposes hereof, "electronic
signature" includes, but is not limited to, a scanned copy of a manual signature, an electronic copy of a
manual signature affixed to a document, a signature incorporated into a document utilizing touchscreen
capabilities, or a digital signature. This agreement may be executed In one or more counterparts, each of
which shall be considered an original instrument, but all of which shall be considered one and the same
agreement.
Entire Agreement
This engagement letter, including any attachments, encompasses the entire agreement of the parties and
supersedes all previous understandings and agieements between the parties, whether oral or written. Any
modification to the terms of this engagement letter must be made in writing and signed by both parties.
This Agreement has been entered into solely between Mason County Public Works and Teresa D Johnson
CPA, Inc and no third -party beneficiaries are created hereby.
We appreciate the opportunity to be of service to Mason County Public Works. Please date and execute
the enclosed copy of this Agreement and return it to us to acknowledge your acceptance. We will not
initiate services until we receive the executed Agreement.
Very truly yours,
iteAmik-
Teresa D. Johnson
Approved:
Loretta Swanson, Director
7/7/ 2oza
Date:
PHONE
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EMAIL
TERESA@TI)JCPA.CON4
6 0 1 2 NW 1 6 9' h Street c-43 Ridgefield Washington (3 9 8 6 4 2
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Terms and Conditions Addendum for Teresa D Johnson CPA, Inc
Overview
This addendum to the engagement letter describes our standard terms and conditions ("Terms and
Conditions') related to our provision of services to you. This addendum, and the accompanying
engagement letter, comprise your agreement with us ("Agreement"). If there is any inconsistency
between the engagement letter and this Terms and Conditions Addendum, the engagement letter
will prevail to the extent of the inconsistency.
For the purposes of this Terms and Conditions Addendum, any reference to "firm," "we," "us," or
"our" is a reference to Teresa D Johnson CPA, Inc, and any reference to "you," or "your" is a
reference to the party or parties that have engaged us to provide services. References to
"Agreement" mean the engagement letter or other written document describing the scope of
services, any other attachments incorporated therein, and this Terms and Conditions Addendum.
Electronic Data Communication and Storage
In the interest of facilitating our services to you, we may send data over the Internet, temporarily
store electronic data via computer software applications hosted remotely on the Internet, or utilize
cloud -based storage. Your confidential electronic data may be transmitted or stored using these
methods. In using these data communication and storage methods, our firm employs measures
designed to maintain data security. We use reasonable efforts to keep such communications and
electronic data secure in accordance with our obligations under applicable laws, regulations, and
professional standards.
You recognize and accept that we have no control over the unauthorized interception or breach of
any communications or electronic data once it has been transmitted or if it has been subject to
unauthorized access while stored, notwithstanding all reasonable security measures employed by
us. You consent to our use of these electronic devices and applications during this engagement.
We will follow Mason County Electronic Information use policy and procedures.
Newsletters (!tl(1 Similar Communications
We may send newsletters, emails, explanations of technical developments or similar
communications to you. These communications are of a general nature and should not be construed
as professional advice. We may not send all such communications to you. These communications
do not constitute a client relationship with you, nor do they constitute advice or an undertaking on
our part to monitor issues for you.
PHONE
360.90•1.0972
EMAIL
T E R E S A@ T D J C P A. C O N1
6 0 1 2 NW 1 6 9`° Street 03 Ridgefield Washington 03 9 8 6 4 2
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Independent Contractor
When providing services to your company, we will be functioning as an independent contractor
and in no event will we or any of our employees be an officer of you, nor will our relationship be
that of joint venturers, partners, employer and employee, principal and agent, or any similar
relationship giving rise to a fiduciary duty to you.
Our obligations under this agreement are solely obligations of Teresa D Johnson CPA, Inc, and no
partner, principal, employee or agent of Teresa D Johnson CPA, Inc shall be subjected to any
personal liability whatsoever to you or any person or entity.
Disclaimer of Legal and Investment Advice
Our services under this Agreement do not constitute legal or investment advice unless specifically
engaged to provide investment advice in the Engagement Objective and Scope section of this
Agreement. We recommend that you retain legal counsel and investment advisors to provide such
advice.
Brokerage or Investment Advisory Statements
If you provide our firm with copies of brokerage (or investment advisory) statements and/or read-
only access to your accounts, we will use the information solely for the purpose described in the
Engagement Objective and Scope section of the engagement letter. We will rely on the accuracy
of the information provided in the statements and will not undertake any action to verify this
information. We will not monitor transactions, investment activity, provide investment advice, or
supervise the actions of the entity or individuals entering into transactions or investment activities
on your behalf. We recommend that you receive and carefully review all statements upon receipt
and direct any questions regarding account activity to your banker, broker or investment advisor.
Limitations on Oral and Email Communications
We may discuss with you our views regarding the treatment of certain items or decisions you may
encounter. We may also provide you with information in an email. Any advice or information
delivered orally or in an email (rather than through a memorandum delivered as an email
attachment) will be based upon limited research and a limited discussion and analysis of the
underlying facts. Additional research or a more complete review of the facts may affect our
analysis and conclusions.
Due to these limitations and the related risks, it may or may not be appropriate to proceed with a
decision solely on the basis of any oral or email communication from us. You accept all
responsibility, except to the extent caused by our. gross negligence or willful misconduct, for any
liability, including but not limited to additional tax, penalties or interest resulting from your
decision (i) not to have us perform the research and analysis necessary to reach a more definitive
conclusion and (ii) to instead rely on an oral or email communication. The limitation in this
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360.904.0972
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Page 7 of 10
paragraph will not apply to an item of written advice that is a deliverable of a separate engagement.
If you wish to engage us to provide formal advice on a matter on which we have communicated
orally or by email, we will confirm this service in a separate engagement letter.
Management Responsibilities
While Teresa D Johnson CPA, Inc can provide assistance and recommendations, you are
responsible for management decisions and functions, and for designating an individual with
suitable skill, knowledge or experience to oversee any services that Teresa D Johnson CPA, Inc
provides. You are responsible for evaluating the adequacy and results of the services performed
and accepting responsibility for such services. You are ultimately responsible for establishing and
maintaining internal controls, including monitoring ongoing activities.
Conflicts of Interest
If we, in our sole discretion, believe a conflict has arisen affecting our ability to deliver services to
you in accordance with either the ethical standards of our firm or the ethical standards of our
profession, we may be required to suspend or terminate our services without issuing our work
product.
Mediation
If a dispute arises out of or relates to the Agreement, including the scope of services contained
herein, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties
agree first to try to settle the dispute by mediation administered by the American Arbitration
Association ("AAA") under the AAA Accounting and Related Services Arbitration Rules and
Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution
procedure. The mediator will be selected by mutual agreement of the parties. If the parties cannot
agree on a mediator, a mediator shall be designated by the AAA.
The mediation will be treated as a settlement discussion and, therefore, all discussions during the
mediation will be confidential. The mediator may not testify for either party in any later proceeding
related to the dispute. No recording or transcript shall be made of the mediation proceedings. The
costs of any mediation proceedings shall be shared equally by all parties. Any costs of legal
representation shall be borne by the hiring party.
Indemnification
Each party shall indemnify, defend, protect, hold harmless, and release the other, its officers,
agents, and employees, from and against any and all claims, loss, proceedings, damages, causes of
action, liability, costs, or expense (including attorneys' fees and witness costs) arising from or in
connection with, or caused by any act, omission, or negligence of such indemnifying party or its
agents, employees, contractors, subcontractors, or invitees. This indemnification obligation shall
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Page 8 of 10
not be limited in any way by any limitation on the amount or type of damages or compensation
payable to or for the indemnifying party under workers' compensation acts, disability benefit acts,
or other employee benefit acts. This indemnity provision survives the Agreement.
Insurance
Teresa D Johnson, CPA Inc shall, during the term of the engagement and for 3 years after
termination of same by either you or us, maintain in full force and effect, accountants professional
liability insurance coverage from an insurance carrier or carriers licensed to conduct business in
the state of Washington. As of the policy effective date, such insurance carrier(s) shall be rated A -
(Excellent), by A.M. Best with a Financial Size Category of Class VII or greater. Premiums for
said insurance policy shall be paid by Teresa D Johnson CPA, Inc.
Upon your written request, Teresa D Johnson CPA, Inc shall furnish certificates of insurance for
the required insurance coverage. Such certificate of Insurance shall indicate the minimum limits
of liability per claim and in the aggregate as required by you.
Proprietary Information
You acknowledge that proprietary information, documents, materials, management techniques and
other intellectual property are a material source of the services we perform and were developed
prior to our association with you. Any new forms, software, documents or intellectual property we
develop during this engagement for your use shall belong to us, and you shall have the limited
right to use them solely within your business. All reports, templates, manuals, forms, checklists,
questionnaires, letters, agreements and other documents which we make available to you are
confidential and proprietary to us. Neither you, nor any of your agents, will copy, electronically
store, reproduce or make available to anyone other than your personnel, any such documents. This
provision will apply to all materials whether in digital, "hard copy" format or other medium.
Force Majeure
Neither party shall be held liable for any delays resulting from circumstances or causes beyond
our reasonable control including, without limitation, fire or other casualty, act of God, strike or
labor dispute, war or other violence, epidemics or pandemics as defined by The Centers for Disease
Control and Prevention, or any law, order or requirement of any governmental agency or authority.
However, no Force Majeure event shall excuse the client of any obligation to pay any outstanding
Invoice or fee or from any indemnification obligation under this Agreement.
Assignment
All parties acknowledge and agree that the terms and conditions of this Agreement shall be binding
upon and inure to the parties' successors and assigns, subject to applicable laws and regulations.
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360.904.0972
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T E R E S A@ T I) J C P A. C O M
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Seve;'ability
If any portion of this Agreement is deemed invalid or unenforceable, said finding shall not operate
to invalidate the remainder of the terms set forth in this Agreement.
Potential Impact of COVID-19 on Services
We and you acknowledge that governmental authorities may restrict travel and/or the movement
of citizens due to the COVID-19 pandemic. In addition, we and you may restrict personnel from
travel and onsite work, whether at a client facility or our facility. Accordingly, to the extent that
the services described in the Agreement requires or relies on personnel to travel and/or perform
work onsite, we and you acknowledge and agree that the performance of such work may be
delayed, significantly or indefinitely, or may require modification. We and you agree to provide
the other with prompt written notice in the event any of the services described herein must be
rescheduled, suspended, or modified. We and you also both acknowledge and agree that any delays
or modifications may increase the cost of the services. We will obtain your prior written approval
for any Increase in the cost of our services that may result from the impact of' COVID-19 on our
services.
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