ORDER NO, '?7771
FIF'GROVE ENGAGEMENT OF PRESSLER, TF-IOMF'SON AND COMF'RNY
On this the ~3r•d day of September, cNN^c, upon motion made by
Commissioner Baldwin, seconded by Commissioner Williams, the
Co~_rr•t unanimously approved by a vote of 4-Q~-0, to engage
Pressler, Thompson and Company to perform the N,er•r Coi_rnty
audit for Fiscal Year c001-c00c'.
COMMISSIONERS' COURT AGENDA REQUEST
PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE
REVIEWED BY THE COURT.
MADE BY: Fred He OFFICE: Courit~udge
MEETING DATE: September 23 2002 TIME PREFERRED:
SUBJECT: (PLEASE BE SPECIFIC)
Consider and discuss engagement of Pressler, Thompson and Company to do Kerr County audit for FY
01-02.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT:
County Jud>;e
ESTIMATED LENGTH OF PRESENTATION:
IF PERSONNEL MATTER -NAME OF EMPLOYEE:
Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter
551 and 552, Govemment Code, is as follows:
Meeting scheduled for Mondays:
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:
5:00 P.M. previous Tuesday.

All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been
prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be
appreciated and contribute towazds you request being addressed at the eazliest opportunity. See Agenda Request Rules
Adopted by Commissioners' Court.
2~ ~
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Carneiro,Chumney8.Co., LC
Robert M. McAdams. CPA	(. Lowell C,oode. CPA
Robert L Lewis, CPA CERTIFlED PUBLIC ACCOUNTANTS	lulu C Norton. CPA
Franklin W. Burk, CPA	Sandra 1. Leppert, CPA
Paul Roth-ROffy. CPA	Allen E Robertson, Ic, CPA
December 7, 1999	
To the Shareholders	
Pressler, Thompson and Company, P.C.	
We have reviewed the system of quality control for the accounting and auditing practice of
Pressler, Thompson and Company, P.C. (the firm) in effect for the year ended August 31, 1999.
A system of quality control encompasses the firm's organizational structure and the policies
adopted and procedures established to provide it with reasonable assurance of complying with
professional standards. The elements of quality control are described in the Statements on
Quality Control Standards issued by the American Institute of Certified Public Accountants
(AICPA). The design of the system and compliance with it are the responsibility of the firm.
Our responsibility is to express an opinion on the design of the system, and the firm's
compliance with the system based on our review.
Our review was conducted in conformity with standards established by the Peer Review Board of
the AICPA. In performing our review, we obtained an understanding of the system of quality
control for the firm's accounting and auditing practice. In addition, we tested compliance with
the firm's quality control policies and procedures to the extent we considered appropriate.
These tests covered the application of the firm's policies and procedures on selected
engagements. Because our review was based on selective tests, it would not necessarily
disclose all the weaknesses in the system of quality control or all instances of lack of compliance
with it.
Because there are inherent limitations in the effectiveness of any system of quality control,
departures from the system may occur and not be detected. Also, projection of any evaluation
of a system of quality control to future periods is subject to the risk that the system of quality
control may become inadequate because of changes in conditions, or because the degree of
compliance with the policies or procedures may deteriorate.
In our opinion, the system of quality control for the accounting and auditing practice of Pressler,
Thompson and Company, P.C. in effect for the year ended August 31, 1999, has been designed
to meet the requirements of the quality control standards for an accounting and auditing
practice established by the AICPA and was being complied with for the year then ended to
provide the firm with reasonable assurance of complying with professional standards.
C ~ f. ~.,
40 N.E. Loop 4 10. Suite 200
San Antonio. Texas 78216-5876
(Z 10) 342-8000 Fax: (210) 342-0866 www.carneiio.com
E p
~annett nl- iepen
Kert County Clerk
700 t`4ain St. Suite 122 Fax. (830) 792-2274
Tel. (830) 792-2255 Kerrville. TX 78028
September 24, 2002
Pressler, Thompson and Company
819 Water Street, Suite 320
One Schreiner Center
Kerrville, TX 78028
Re: Letter of Agreement
Dear Pressler, Thompson and Company
Please find enclosed a copy of the Letter of Agreement signed by Kerr County Judge,
Frederick Henneke.
If you have any questions, please call me.
Sincerely,
`;~ ~~~~n~lr.OxJ
Linda Hamilton
Ken County Clerk's Office
Encl.
PRESSLER, TFiOMPSON AND COMPANY
	A PROFESSIONAL CORPORATION	
William F Thompson, C.P.A.	CERTIFIED PUBLIC ACCOUNTANTS	
Ernst H. Druebert, Jc, C.P.A.	ONE SCHREINER CENTER	P.O. Box 290590
Jerry N. Oliver, C.P.A.	819 WATER STREET
SUITE 320	Telephone (830) 257-7241
Douglas H. Sundberg, C.P.A.	,	Fax (630) 896-4041
Timothy R. Poser, C.P.A.	KERRVILLE, TEXAS 78028	Email: into@ptcocpa.com
September 3, 2002
The Honorable Judge and Members of the
Commissioners Court
Kerr County
Kerrville, Texas
We are pleased to confirm our understanding of the services we are to provide Kerr County (including the
Texas Juvenile Probation Commission and the Texas Department of Criminal Justice, Community Justice
Assistance Division) for the Year ended September 30, 2002. We will audit the financial statements of Kerr
County as of and for the Year ended September 30, 2002. We understand that the financial statements will
be presented in accordance with the financial reporting model in effect prior to that described in GASB
Statement No. 34. Also, the document we submit to you will include the following additional information
that will be subjected to the auditing procedures applied in our audit of the general purpose financial
statements:
Schedule of expenditures of federal awards.
Audit Objectives
The objective of our audit is the expression of an opinion as to whether your financial statements are fairly
presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to
report on the fairness of the additional information referred to in the first 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 laws, regulations, and
the provisions of contracts or grant agreements, noncompliance with which could have a
material effect on the financial statements in accordance with Government Auditing 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 OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations.
The reports on internal control and compliance will each include a statement that the report is intended for
the information and use of management, specific legislative or regulatory bodies, federal awarding agencies,
and if applicable, pass-through entities and is not intended to be and should not be used by anyone other
than these specified parties.
Our audit will be conducted in accordance with U.S. generally accepted auditing standards; the standards
for financial audits contained in Government Auditing 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 Circular A-
133, and other procedures we consider necessary to enable us to express such an opinion and to render
the required reports. If our opinion on the f nancial statements or the Single Audit compliance opinion is
other than unqualified, we will fully 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 an opinion, we may decline to
express an opinion or to issue a report as a result of this engagement.
Management Responsibilities
Management is responsible for establishing and maintaining internal control and for compliance with the
provisions of contracts, agreements, and grants. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of the controls. The objectives
of internal control are to provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, that transactions are executed in
accordance with management's authorizations and recorded properly to permit the preparation of financial
statements in accordance with generally accepted accounting principles, and that federal award programs
are managed in compliance with applicable laws and regulations and the provisions of contracts and grant
agreements.
Management is responsible for making all financial records and related information available to us. We
understand that you will provide us with such information required for our audit and that you are responsible
for the accuracy and completeness of that information. We will advise you about appropriate accounting
principles and their application and will assist in the preparation of your financial statements, including the
schedule of expenditures of federal awards, but the responsibility for the financial statements remains with
you. That responsibility includes the establishment and maintenance of adequate records and effective
internal control over financial reporting and compliance, the selection and application of accounting
principles, and the safeguarding of assets. Management is responsible for adjusting the financial
statements to correct material misstatements and for confirming to us in the 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. Additionally, as required by OMB Circular A-133, it is management's
responsibility to follow up and take corrective action on reported 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.
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. 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
errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental
regulations that are attributable to the entity or to acts by management or employees acting on behalf of the
entity. As required by the Single Audit Act Amendments of 1996 and OMB Circular A-133, our audit will
include test of transactions related to major federal award programs for compliance with applicable laws and
regulations and the provisions of contracts and grant agreements. Because an audit is designed to provide
reasonable, but not absolute assurance 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. In 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 you of any material errors and any fraudulent financial reporting or
misappropriation of assets that comes to our attention. We will also inform you of any violations of laws or
governmental regulations that come to our attention, unless clearly inconsequential. We will include such
matters in the reports required for a Single Audit. Our responsibility as auditors is limited to the period
covered by our audit and does not extend to matters that might arise during any later periods for which we
are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, and may include tests of the physical existence of inventories, and direct confirmation of
receivables and certain other assets and liabilities by correspondence with selected individuals, 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 Procedures-Internal Controls
In planning and performing our audit, we will consider the internal control sufficient to plan the audit in order
to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing our
opinions on Kerr County's financial statements and on its compliance with requirements applicable to major
programs.
We will obtain an understanding of the design of the relevant controls and whether they have been placed in
operation, and we will assess control risk. 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. Tests of controls
relative to the financial statements are required only if control risk is assessed below the maximum level.
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
Govemment Auditing Standards.
As required by OMB Circular A-133, we will perform tests of controls to evaluate the effectiveness of the
design and operation of controls that we consider relevant to preventing or detecting material noncompliance
with compliance requirements applicable to each major 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 reportable conditions.
However, we will inform the governing body or audit committee of any matters involving internal control and
its operation that we consider to be reportable conditions under standards established by the American
Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention
relating to significant deficiencies in the design or operation of the internal control that, in our judgment,
could adversely affect the entity's ability to record, process, summarize, and report financial data consistent
with the assertions of management in the financial statements. We will also inform you of any nonreportable
conditions or other matters involving internal control, if any, as required by OMB Circular A-133.
Audit Procedures~ompliance
Our audit will be conducted in accordance with the standards referred to in the section titled Audit
Objectives. As part of obtaining reasonable assurance about whether the financial statements are free of
material misstatement, we will perform tests of Kerr County's compliance with applicable laws and
regulations and the provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures 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 Auditing Standards.
OMB Circular A-133 requires that we also plan and pertorm 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 the applicable procedures
described in the OMB CimularA-133 Compliance Supplement for the types of compliance requirements that
could have a direct and material effect on each of Kerr County's major programs. The purpose of those
procedures will be to express an opinion on Kerr County's compliance with requirements applicable to
major programs in our report on compliance issued pursuant to OMB Circular A-133.
Audit Administration, Fees, and Other
We understand that your employees will locate any invoices selected by us for testing.
At the conclusion of the engagement, we will complete the appropriate sections of and sign the Data
Collection Form that summarizes our audit findings. We will provide an original and print-ready master of our
reports to Kerr County; however, it is management's responsibility to submit the reporting package
(including financial statements, schedule of expenditures of federal awards, summary schedule of prior audit
findings, auditors' reports, and a corrective action plan) along with the Data Collection Form to the
designated federal clearinghouse and, if appropriate, 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. At the conclusion of the engagement, we will provide information to
management as to where the reporting packages should be submitted and the number to submit.
The workpapers for this engagement are the property of Pressler, Thompson and Company and constitute
confidential information. However, we may be requested to make certain workpapers available to the
granting agency pursuant to authority given to it by law or regulation. If requested, access to such
workpapers will be provided under the supervision of Pressler, Thompson and Company personnel.
Furthermore, upon request, we may provide photocopies of selected workpapers to the granting agency.
The granting agency may intend, or decide, to distribute the photocopies or information contained therein to
others, including other governmental agencies.
The workpapers for this engagement will be retained for a minimum of three years after the date the
auditors' report is issued or for any additional period requested by the granting agency. If we are aware that
a federal awarding agency, pass-through entity, or auditee is contesting an audit finding, we will contact the
party(ies) contesting the audit finding for guidance prior to destroying the workpapers.
Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report
reproduction, typing, postage, travel, copies, telephone, etc.) except that we agree that our gross fee,
including expenses, will not exceed $23,250. Our standard hourly rates vary according to the degree of
responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for
these fees will be rendered upon completion of the engagement. The above fee is based on anticipated
cooperation from your personnel and the assumption that unexpected circumstances will not be
encountered during the audit. If significant additional time is necessary, we will discuss it with you and
arrive at a new fee estimate before we incur the additional costs.
Government Auditing Standards require that we provide you with a copy of our most recent quality control
review report. Our 1999 peer review report accompanies this letter.
We appreciate the opportunity to be of service to Kerr County 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,
~'~~~~~
Pressler, Thompson and Company
RESPONSE:
This letter correctly sets forth the understanding of Kerr County.
_.
Title: Kerr County Judge
Date:
09/23/02