ORDER NO. 29430
ENGAGE PRESSLER THOMPSON & CO. TO PERFORM AUDIT FOR
FISCAL YEAR ENDING SEPTEMBER 30, 2005
Came to be heard this the 11th day of October, 2005, with a motion made by
Commissioner Williams, seconded by Commissioner Nicholson. The Court
unanimously approved by vote of 3-0-0 to:
Approve appointment of Pressler Thompson & Co. to perform audit for
fiscal year ending September 30, 2005, and authorize County Judge to sign
the Letter of Engagement.
a9H30
I ~ ~. ~ COMMISSIONERS' COURT AGENDA REOUEST
PLEASE FURNISH ONE ORIGINAL AND TEN COPIES OF THIS
MADE BY: Pat Tinley OFFICE: County Judge
Tommy Tomlinson County Audit'
MEETING DATE: October I I, 2005 TIME PREFERRED:
SUBJECT: Consider, discuss and take appropriate action to engage Pressler Thompson
& Co. to perform audit for fiscal yeaz ending September 30, 2005.
EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON)
NAME OF PERSON ADDRESSING THE COURT: County Judge/County Auditor
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, Government Code, is as follows:
Meeting scheduled for Mondays:
5:00 P.M. previous Tuesday.
THIS REQUEST RECEIVED BY:
THIS REQUEST RECEIVED ON:

All Agenda Requests will be screened by the County Judge's Office to determine if adequate
information has been prepazed for the Court's formal consideration and action at time of Court
Meetings. Your cooperation will be appreciated and contribute towards you request being
addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners'
Court.
William F Thompson, C.P A.
Emst H. Dmebert, Jc, C.P.A.
Jerry N. Oliver, C.P.A.
Douglas N. Sunoberg, C.P.A.
Timothy R. Porter, C.PA.
September 8, 2005
PRESSLER, THOMPSON AND COMPANY
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
ONE SCHREINER CENTER
819 WATER STREET, SUITE 320
RERRVILLE, TEXAS 78028
The Honorable Judge and Members of the
Commissioners Court
Kerr County
Kerrville, Texas
P, O. Box 290690
Telephone (830) 257-7241
Faz (630)8964041
Email: info~ptcocpa.com
Website: viww.ptcocpa.com
We are pleased to confirm our understanding of the services we are to provide Kerr County for
the year ended September 30, 2005. We will audit the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund
information, which collectively comprise the entity's basic financial statements, of Kerr County as
of and for the year ended September 30, 2005. The document we submit to you will include the
following supplementary information required by generally accepted accounting principles that will
be subjected to certain limited procedures, but will not be audited:
Management's Discussion and Analysis.
2. Budgetary Comparison Schedules
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. Our
audit will be conducted in accordance with U.S. generally accepted auditing standards and the
standards for financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States, and will include tests of the accounting records of Kerr
County and other procedures we consider necessary to enable us to express such an opinion. If
our opinion on the financial statements 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.
We will also provide a report (that does not include an opinion) 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 as required by Government Auditing Standards. This report will include a statement
that the report is intended solely for the information and use of the audit committee, management,
and specific legislative or regulatory bodies and is not intended to be and should not be used by
anyone other than these specified parties.
Management Responsibilities
Management is responsible for establishing and maintaining effective internal control and for
compliance with laws, regulations, contracts, and agreements. 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.
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 advise you in the
preparation of your financial statements, but the responsibility for the financial statements
remains with you. As part of our engagement, we may propose standard, adjusting, or correcting
journal entries to your financial statements. You are responsible for reviewing the entries and
understanding the nature of any proposed entries and the impact they have on the financial
statements. That responsibility includes the establishment and maintenance of adequate records
and effective internal control over financial reporting, 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.
You are responsible for the design and implementation of programs and controls to prevent and
detect fraud, and for informing us about all known or suspected fraud, or illegal acts affecting the
government involving (1) management, (2) employees who have significant roles in internal
control, and (3) others where the fraud or illegal acts could have a material effect on the financial
statements. You are also responsible for informing us of your knowledge of any allegations of
fraud or suspected fraud, or illegal acts affecting the government received in communications
from employees, former employees, grantors, regulators, or others. In addition, you are
responsible for identifying and ensuring that the entity complies with applicable laws and
regulations and for taking timely and appropriate steps to remedy any fraud, illegal acts, violations
of contracts or grant agreements, or abuse that we may report.
As part of the audit, we will prepare a draft of your financial statements and related notes. In
accordance with Government Auditing Standards, you will be required to review and approve
those financial statements prior to their issuance and have a responsibility to be in a position in
fact and appearance to make an informed judgment on those financial statements. Further, you
are required to designate a qualified management-level individual to be responsible and
accountable for overseeing our services.
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 (1) errors, (2) fraudulent financial reporting, (3)
misappropriation of assets, or (4) 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.
Because the determination of abuse is subjective, Government Auditing Standards do not expect
auditors to provide reasonable assurance of detecting abuse. 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 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. However, we will inform you of any material errors that come to our
attention, and we will inform you of 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. 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.
Identifying and ensuring that Kerr County complies with laws, regulations, contracts, and
agreements is the responsibility of management. 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. However, the objective of our audit will not be to provide an opinion on overall
compliance and we will not express such an opinion.
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 opinion on Kerr County's financial statements.
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 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 Government Auditing Standards.
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 Government Auditing Standards.
Audit Administration, Fees, and Other
We understand that your employees will locate any documents selected by us for testing.
The audit documentation for this engagement is the property of Pressler, Thompson and
Company and constitutes confidential information. However, pursuant to authority given by law or
regulation, we may be requested to make certain audit documentation available to granting
agencies. We will notify you of any such request. If requested, access to such audit
documentation will be provided under the supervision of Pressler, Thompson and Company
personnel. Furthermore, upon request, we may provide copies of selected audit documentation to
the aforementioned parties. These parties may intend, or decide, to distribute the copies or
information contained therein to others, including other governmental agencies.
Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as
report reproduction, word processing, postage, travel, copies, telephone, etc.) except that we
agree that our gross fee, including expenses, will not exceed $27,500. 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
external peer review report. Our 2002 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,
Pr~, Tho~n~mp
RESPONSE:
This letter correctly sets forth the understanding of Kerr County.
r
By:~
Title: Kerr County Sudge
October 11, 2005
Carneiro,Chumney~Co., L.c.
Robert M. McAdams, CPA
Robert L. Lewis, CPA
!. Franldin W. Burk, CPA
' Paul Roth-Rof(y, CPA
CERTIFIED PUBLIC ACCOUNTANTS
J. Lowell Goode, CPA
Julia C. Norton, CPA
Sandra J. Leppert, CPA
Allen E. Robertson, Jc, CPA
January 16, 2003
To the Partners
Pressler, Thompson and Company
We have reviewed the system of quality control for the accounting and auditing practice of
Pressler, Thompson and Company (the firm) in effect for the year ended August 31, 2002. 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 inconformity 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 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 occurand 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 in effect for the year ended August 31, 2002, has been designed to
meet the requirements of the quality control standards for an accounting and auditing practice
established by the AICPA and was complied with during the year then ended to provide the firm
with reasonable assurance of complying with professional standards.
~~a a Lo . oL C .
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"Helping Clients Succeed for 72 Years"
40 NE Loop 410, Suite 200 ~ San Antonio, Texas 78216-5876
(210)342-8000 Fax: (210)342-0866
E-mail: carneiro@carnelro.mm ~ www.carnelro.com
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