Search

w MELANSON

Management Responsibilities

Our audit will be conducted on the basis that management and, when appropriate, those charged
with governance acknowledges and understands that they have responsibility:

a. For the preparation and fair presentation of the basic financial statements in accordance
with accounting principles generally accepted in the United States of America;

b. For the design, implementation, and maintenance of internal control relevant to the prep-
aration and fair presentation of financial statements that are free from material misstate-
ment, whether due to error, fraudulent financial reporting, misappropriation of assets, or
violations of laws, governmental regulations, grant agreements, or contractual agreements;

c. To provide us with:

e Access to all information of which management is aware that is relevant to the prep-
aration and fair presentation of the financial statements including the disclosures,
and relevant federal award programs, such as records, documentation, and other
matters;

e Additional information that we may request from management for the purpose of
the audit;

e Unrestricted access to persons within the City from whom we determine it necessary
to obtain audit evidence;

e Awritten acknowledgement of all the documents that management expects to issue
that will be included in the annual report and the planned timing and method of
issuance of that annual report; and

e A final version of the annual report (including all the documents that, together,
comprise the annual report) in a timely manner prior to the date of the auditor’s
report.

d. For including the auditors’ report in any document containing financial statements that
indicates that such financial statements have been audited by us;

e. For identifying and ensuring that the City complies with laws, regulations, rules, provisions of
contracts or grant agreements, and contracts applicable to its activities;

f. For adjusting the financial statements to correct material misstatements and confirming to us
in the management representation letter that the effects of any uncorrected misstatements
aggregated by us during the current engagement and pertaining to the current year period(s)
under audit are immaterial, both individually and in the aggregate, to the financial statements
as a whole;

g. For acceptance of nonattest services, including identifying the proper party to oversee
nonattest work.;

800.282.2440 | melansoncpas.com

w MELANSON

h.

For maintaining adequate records, selecting and applying accounting principles, and safe-
guarding assets;

For informing us of any known or suspected fraud affecting the entity involving management,
employees with significant role in internal control and others where fraud could have a
material effect on the financials;

For the accuracy and completeness of all information provided; and

For confirming your understanding of your responsibilities as defined in this letter to us in
your management representation letter.

Single audit —

For identifying, in its accounts, all federal awards received and expended during the
period and the federal programs under which they were received;

For maintaining records that adequately identify the source and application of funds
for federally funded activities;

For preparing the Schedule of Expenditures of Federal Awards (including notes and
noncash assistance received) in accordance with the Uniform Guidance;

For designing, implementing, and maintaining effective internal control over federal
awards that provides reasonable assurance that the entity is managing federal awards
in compliance with federal statutes, regulations, and the terms and conditions of the
federal awards;

For identifying and ensuring that the City complies with federal laws, statutes,
regulations, rules, provisions of contracts or grant agreements, and the terms and
conditions of federal award programs, and implementing systems designed to achieve
compliance with applicable federal statutes, regulations, and the terms and conditions
of federal award programs;

For disclosing accurately, currently, and completely the financial results of each federal
award in accordance with the requirements of the award;

For identifying and providing report copies of previous audits, attestation
engagements, or other studies that directly relate to the objectives of the audit,
including whether related recommendations have been implemented;

For taking prompt action when instances of noncompliance are identified;

For addressing the findings and recommendations of auditors, for establishing and
maintaining a process to track the status of such findings and recommendations and
taking corrective action on reported audit findings from prior periods and preparing a
summary schedule of prior audit findings;

800.282.2440 | melansoncpas.com

w MELANSON

e For following up and taking corrective action on current year audit findings and
preparing a corrective action plan for such findings;

e For submitting the reporting package and data collection form to the appropriate
parties; and

e For making the auditor aware of any significant vendor/contractor relationships where
the vendor/contractor is responsible for program compliance.

With regard to the Schedule of Expenditures of Federal Awards referred to above, you
acknowledge and understand your responsibility (a) for the preparation of the Schedule of
Expenditures of Federal Awards in accordance with the Uniform Guidance, (b) to provide us with
the appropriate written representations regarding the Schedule of Expenditures of Federal
Awards, (c) to include our report on the Schedule of Expenditures of Federal Awards in any
document that contains the Schedule of Expenditures of Federal Awards and that indicates that
we have reported on such schedule, and (d) to present the Schedule of Expenditures of Federal
Awards with the audited financial statements, or if the Schedule will not be presented with the
audited financial statements, to make the audited financial statements readily available to the
intended users of the Schedule of Expenditures of Federal Awards no later than the date of
issuance by you of the Schedule and our report thereon.

With regard to the supplementary information referred to above, you acknowledge and
understand your responsibility (a) for the preparation of the supplementary information in
accordance with the applicable criteria, (b)to provide us with the appropriate written
representations regarding supplementary information, (c)to include our report on the
supplementary information in any document that contains the supplementary information and
that indicates that we have reported on such supplementary information, and (d) to present the
supplementary information with the audited financial statements, or if the supplementary
information will not be presented with the audited financial statements, to make the audited
financial statements readily available to the intended users of the supplementary information no
later than the date of issuance by you of the supplementary information and our report thereon.

As part of our audit process, we will request from management and, when appropriate, those charged

with governance, written confirmation concerning representations made to us in connection with
the audit.

800.282.2440 | melansoncpas.com

w MELANSON

Nonattest Services

As part of this engagement we will perform the following nonattest services, based on
information gathered during the audit process:

e Preparation of the financial statements in their entirety.

e Consolidating funds into governmental and business-type activities and converting to the
accrual basis of accounting based on information from the City’s accounting records.

e Preparation of the Data Collection Form (DCF).

We will not assume management responsibilities on behalf of the City. However, we will provide
advice and recommendations to assist management of the City in performing its responsibilities.

The City’s management is responsible for (a) making all management decisions and performing
all management functions; (b) assigning a competent individual to oversee the services;
(c) evaluating the adequacy of the services performed; (d) evaluating and accepting responsibility
for the results of the services performed; and (e) establishing and maintaining internal controls,
including monitoring ongoing activities.

We are not hosts for any client information. You are expected to retain all financial and non-
financial information to include anything you upload to a portal and are responsible for down-
loading and retaining anything we upload in a timely manner. Portals, including ShareFile, are only
meant as a method of transferring data, are not intended for the storage of client information,
and may be deleted at any time. You are expected to maintain control over your accounting systems
to include the licensing of applications and the hosting of said applications and data. We do not
provide electronic security or back-up services for any of your data or records. Giving us access
to your accounting system does not make us hosts of information contained within.

This engagement is limited to the services previously outlined. Our firm, in its sole professional
judgment, reserves the right to refuse to do any procedure or take any action that could be
construed as making management decisions or assuming management responsibilities, including
determining account codings and approving journal entries.

Reporting

We will issue a written report upon completion of our audit of the City’s basic financial statements.
Our report will be addressed to appropriate addressee, e.g., the governing body of the City.
Circumstances may arise in which our report may differ from its expected form and content based
on the results of our audit. Depending on the nature of these circumstances, it may be necessary
for us to modify our opinions, add an emphasis-of-matter or other-matter paragraph(s) to our

800.282.2440 | melansoncpas.com

w MELANSON

auditor’s report, or if necessary, withdraw from the engagement. If our opinions on the basic
financial statements are other than unmodified, we will discuss the reasons with you in advance.
lf, for any reason, we are unable to complete the audit or are unable to form or have not formed
opinions, we may decline to express opinions or to issue a report as a result of this engagement.

In accordance with the requirements of Government Auditing Standards, we will also issue a written
report describing the scope of our testing over internal control over financial reporting and over
compliance with laws, regulations, and provisions of grants and contracts, including the results of
that testing. However, providing an opinion on internal control and compliance over financial
reporting will not be an objective of the audit and, therefore, no such opinion will be expressed.

Group Audit Considerations

Our audit will be a group audit as defined by AU-C Section 600. We have identified Pennichuck
Corporation, and Nashua Airport Authority as components of our group audit. Our Firm will act
as the auditor for Pennichuck Corporation. Another firm will act as the auditor for the Nashua
Airport Authority and we will communicate to the other auditors our intention to rely on their
opinion on the applicable components’ financial statements. At the conclusion of our audit we
will obtain this representation and approval to rely on such opinion.

Engagement Administration and Fees

Engagement Administration

Edward J. Boyd, Jr., CPA is the engagement principal for the audit services specified in this letter.
Those responsibilities include supervising the City services performed as part of this engagement
and signing or authorizing another qualified firm representative to sign the audit report.

In order for us to complete this engagement, and to do so efficiently, we require unrestricted
access to documents and individuals within your organization. We understand that your
employees will prepare all cash and other confirmations we request and will locate and provide
to us any documents selected by us for testing. Any failure to provide such cooperation, and to
do so on a timely basis, will impede our services, and may require us to bill you for additional
time, suspend our services, or withdraw from the engagement.

Fees
Our fee for audit services will be $132,500 for each fiscal year audit. This fee does not include the
audit of Pennichuck Corporation.

This fee assumes the audit of three Federal programs (clusters). The uncertainty surrounding the
affect the COVID-19 pandemic may result in an increase in the number of Federal programs

800.282.2440 | melansoncpas.com
10

w MELANSON

(clusters) required to be audited in compliance with Uniform Guidance. As a result, additional
fees may apply. We will discuss this with you once this determination is made.

Our invoices for these fees will be rendered each month as work progresses and are payable on
presentation. The above fees are 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. Our fee also anticipates that the City will prepare trial balances and
supporting schedules. As part of the engagement, we will be available during the year to consult
with you on financial management and accounting matters of a routine nature. Additional fees at
our standard hourly rates will be charged for any other out-of-scope services.

As part of this engagement, bound copies of financial statements will not be provided unless
specifically requested, and are limited to twenty (20) copies. Hard copies of the Management
Letter, Governance Letter, Single Audit Report, will not be provided as part of this engagement.
Additional copies of the financial statements, and hard copies of other reports are available upon
request, with the associated costs of reproduction billed at our standard hourly rates plus out-of-
pocket expenses.

Billing and Termination of Services for Nonpayment

We specifically reserve the right to cease providing services and, if necessary in our sole opinion,
to withdraw from the engagement if any fees are unpaid for more than sixty (60) days from the
date of our invoice. If we elect to terminate our services for nonpayment, or for any other reason
provided for in this letter, our engagement will be deemed to have been completed upon written
notification of termination, even if we have not completed our engagement. You will be obligated
to compensate us for all time expended, and to reimburse us for all of our out-of-pocket costs,
through the date of termination.

Other Matters

Communications Via Email

In connection with this engagement, we request that you provide as much documentation as
possible via our secure portal, ShareFile, instead of through email. As emails can be intercepted
and read, disclosed, or otherwise used or communicated by an unintended third party, or may
not be delivered to each of the parties to whom they are directed and only to such parties, we
cannot guarantee or warrant that emails from us will be properly delivered and read only by the
addressee. Therefore, we specifically disclaim and waive any liability or responsibility whatsoever
for interception or unintentional disclosure of emails transmitted by us in connection with the
performance of this engagement. In that regard, you agree that we shall have no liability for any
loss or damage to any person or entity resulting from the use of email transmissions, including

800.282.2440 | melansoncpas.com
11

w MELANSON

any consequential, incidental, direct, indirect, or special damages, such as loss of revenues or
anticipated profits, or disclosure or communication of confidential or proprietary information.

Publishing of the Financial Statements

You are responsible to notify us in advance of your intent to reproduce our report for any reason,
in whole or in part, and to give us the opportunity to review any printed material containing our
report before its issuance. Such notification does not constitute an acknowledgement on our part
of any third party's intent to rely on the financial statements. With regard to financial statements
published electronically on your internet website, you understand that electronic sites are a
means to reproduce and distribute information. We are not required to read the information
contained in your sites, or to consider the consistency of other information in the electronic site
with the original document.

Subsequent Events

You agree to inform us of facts that may affect the basic financial statements of which you may
become aware during the period from the date of the auditor’s report to the date the financial
statements are issued.

Recommendations

During the course of the audit, we may observe opportunities for economy in, or improved controls
over, your operations. We will bring such matters to the attention of the appropriate level of man-
agement, either orally or in writing.

Peer Review Report
In accordance with the requirements of Government Auditing Standards, a copy of our latest external
peer review report of our firm is available upon request for your consideration and files.

Communication with Those Charged with Governance
At the conclusion of our audit engagement, we will communicate to those charged with governance
the following significant findings from the audit:

e Our view about the qualitative aspects of the City’s significant accounting practices;
e Significant difficulties, if any, encountered during the audit;

e Uncorrected misstatements, other than those we believe are trivial, if any;

e Disagreements with management, if any;

e Other findings or issues, if any, arising from the audit that are, in our professional judgment,
significant and relevant to those charged with governance regarding their oversight of the
financial reporting process;

800.282.2440 | melansoncpas.com
12

w MELANSON

e Material, corrected misstatements that were brought to the attention of management as
a result of our audit procedures;

e Representations we requested from management;
e Management’s consultations with other accountants, if any; and

e Significant issues, if any, arising from the audit that were discussed, or the subject of cor-
respondence, with management.

Records and Records Retention
In connection with this engagement, we request that you provide as much documentation as
possible via our secure portal, ShareFile, instead of providing hardcopies.

The audit documentation for this engagement is the property of Melanson and constitutes
confidential information. However, we may be requested to make certain audit documentation
available to regulators and federal agencies and the U.S. Government Accountability Office
pursuant to authority given to it by law or regulation, or to peer reviewers. If requested, access
to such audit documentation will be provided under the supervision of Melanson’s personnel.
Furthermore, upon request, we may provide copies of selected audit documentation to these
agencies and regulators. The regulators and agencies may intend, or decide, to distribute the
copies of information contained therein to others, including other governmental agencies.

It is our policy to retain our audit documentation for a period of at least seven years from the
date of our report.

Please sign and return a copy of this letter to indicate your acknowledgment of, and agreement
with, the arrangements for our audit of the financial statements including our respective

responsibilities.

We appreciate the opportunity to be your auditors and look forward to working with you and your
staff.

Sincerely,

ple) Bl pr

Edward J. Boyd, CPA
Principal

800.282.2440 | melansoncpas.com
13

w MELANSON

Ce ee ee ee

RESPONSE:
This letter correctly sets forth our understanding.

Acknowledged and agreed on behalf of the City of Nashua, New Hampshire by:

Signature:

Name:

Title:

Date:

800.282.2440 | melansoncpas.com
14

Jim Donchess
Mayor e City of Nashua

To: Board of Aldermen

Filed With: Sue Lovering, City Clerk

From: Jim Donchess

Date: June 28, 2022

Re: Emergency PO Request — Wastewater Chemicals

Pursuant to 5-90 (G) of the NRO, | have authorized Emergency Purchase Order Request for the purchase of
sodium hypochlorite in an amount of $30,000 to Univar U.S.A of Morrisville PA for the product required as
detailed below.

The Wastewater Department uses the chemical Sodium Hypochlorite to disinfect the
wastewater before it is discharged into the Merrimack River. The original fiscal year funding
for the purchase of Sodium Hypochlorite was approved at the June 24, 2021 BPW Meeting
with the company Borden & Remington.

Due to railcar issues in mid-June 2022, the company was unable to receive raw materials for
making the chemical and is unable to deliver to their customers. Because the Wastewater
Facility must disinfect its treated wastewater to meet EPA permit regulations, we reached out
to Univar U.S.A, Inc, who was the second low bidder through the Northeast/Merrimack
Valley Chemical Consortium bid process. Univar is able to supply the wastewater facility
with Sodium Hypochlorite for the remainder of FY22.

We are requesting an emergency PO in the amount of $30,000.00 to Univar U.S.A., Inc of
Morrisville, PA for the delivery of Sodium Hypochlorite through the remainder of the fiscal

year.
Thank you.
cc: DPW Administration

229 Main Street * PO Box 2019 * Nashua, New Hampshire 03061-2019
603.589.3260 * fax 603.594.3450 * NashuaMayor@NashuaNH. gov
www.NashuaNH. gov