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/\|NORTH PCO #02
| CONSTRUCTION MANAGEMENT
a | NWA 15-300 - Fire Protection ADO ALT 2- Replace existing alr compressor. Subcontractors $2,200.00
4 |b 17-00 - General (FEI Code 1) NPCM 10% OH & Foe Overhead $1,207.50
Subtotak $19,282.80
Grand Total: $13,202.80
City of Nashua Purchasing Dept. NorthPoint Construction Management
229 Main Street 22 Hampshire Drive
Nashua, New Hampshire 03061 Hudson, Naw Hampshire 03054
SIGNATURE DATE SIGNATURE DATE SIGNATURE DATE
NorthPolnt Construction Management page 2 of 2 Printed On: 4/28/2020 04:41 PM

MELANSON

ACCOUNTANTS + AUDITORS

102 Perimeter Road
Nashua, NH 02065
(603)882-1171

melansonheath.com

January 14, 2020

Additional Offices:
Andover MA

Mr. John Griffin Greenfield, MA
Chief Financial Officer Manchester, NH
City of Nashua Ellsworth, ME

229 Main Street
Nashua, New Hampshire 03061

Dear Mr. Griffin:

You have requested that we audit the basic financial statements of the governmental activities,
the business-type activities, each major fund, and the aggregate remaining fund information of
the City of Nashua, New Hampshire (the City), as of June 30, 2020 — 2021 and for the years then
ended, and the related notes to the financial statements. In addition, we will audit the City’s
compliance over major federal award programs for the years ended June 30, 2020 - 2021. We are
pleased to confirm our acceptance and our understanding of this audit engagement by means of
this letter. Our audits will be conducted with the objectives of our expressing an opinion on each
opinion unit and an opinion on compliance regarding the City’s major federal award programs.

Accounting principles generally accepted in the United States of America require that certain
information be presented to supplement the basic financial statements, including the management’s
discussion and analysis (MD&A) and various pension and other post-employment benefits (OPEB)
schedules. Such information, although not a part of the basic financial statements, is required by
the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. As part of our engagement, we will apply certain limited procedures to the required
supplementary information (RSI) in accordance with auditing standards generally accepted in the
United States of America. These limited procedures will consist primarily of inquiries of manage-
ment regarding their methods of measurement and presentation, and comparing the information for
consistency with management’s responses to our inquiries. We will not express an opinion or provide
any form of assurance on the RSI.

Supplementary information other than RSI will accompany the City’s basic financial statements. We
will subject the following supplementary information to the auditing procedures applied in our
audit of the basic financial statements and certain additional procedures, including comparing
and reconciling the supplementary information to the underlying accounting and other records
used to prepare the financial statements or to the financial statements themselves, and additional
procedures in accordance with auditing standards generally accepted in the United States of America.

We intend to provide an opinion on the following supplementary information in relation to the
financial statements as a whole:

e Supplementary Statements and Schedules

Also, the document we submit to you will include the following other additional information that
will not be subjected to the auditing procedures applied in our audit of the financial statements:

e Introductory Section

® Statistical Section
The Objective of an Audit

The objective of our audit fs the expression of opinions as to whether your basic financial state-
ments are fairly presented, in all material respects, in accordance with generally accepted accounting
principles and to report on the fairness of the supplementary information referred to in the second
paragraph when considered in relation to the financial statements as a whole. Our audit will be
conducted in accordance with auditing standards generally accepted in the United States of America
and will include tests of the accounting records and other procedures we consider necessary to
enable us to express such opinions. We cannot provide assurance that unmodified opinions will
be expressed. Circumstances may arise in which it is necessary for us to modify our opinions or
add emphasis-of-maitter or other-matter paragraphs. If our opinions on the financial statements
are other than unmodified, we will 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 opinions, we may
decline to express opinions or to issue a report as a result of this engagement.

General Audit Procedures

We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America (U.S. GAAS), the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States of America; the audit
requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Those standards and the Uniform Guidance require that we plan and perform the audit to obtain
reasonable assurance about whether the basic financial statements are free from material mis-
statement. An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements, The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial state-
ments, whether due to error, fraudulent financial reporting, misappropriation of assets, or violations
of laws, governmental regulations, grant agreements, or contractual agreements.

An audit also includes evaluating the appropriateness of accounting policies used and the reason-
ableness of significant accounting estimates made by management, as well as evaluating the overall

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presentation of the financial statements. Our procedures also include certain tests of documentary

evidence that support the transactions recorded in the accounts. As part of our audit process, we
will request written representations from your attorneys, and they may bill you for responding.
At the conclusion of our audit, we will also request certain written representations from you
about the basic financial statements and related matters.

Internal Control Audit Procedures

Because of the inherent limitations of an audit, together with the inherent limitations of internal
control, an unavoidable risk that some material misstatements or noncompliance (whether caused
by errors, fraudulent financial reporting, misappropriation of assets, detected abuse, or violations
of laws or governmental regulations) may not be detected exists, even though the audit is properly
planned and performed in accordance with U.S. GAAS and Government Auditing Standards of the
Comptroller General of the United States of America. Please note that the determination of abuse
is subjective and Government Auditing Standards does not require auditors to detect abuse.

In making our risk assessments, we consider internal control relevant to the City’s preparation
and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. However, we will communicate to you in writing
concerning any significant deficiencies or material weaknesses in internal control relevant to the
audit of the financial statements that we have identified during the audit.

Compliance with Laws and Regulations

As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we will perform tests of the City’s compliance with the provisions of applicable
laws, regulations, 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 of Major Program Compliance

Our audit of the City’s major federal award programs compliance will be conducted in accordance
with the requirements of the Single Audit Act, as amended; and the Uniform Guidance, and will
include tests of accounting records, a determination of major programs in accordance with the
Uniform Guidance and other procedures we consider necessary to enable us to express such an
opinion on major federal award program compliance and to render the required reports. We
cannot provide assurance that an unmodified opinion on compliance will be expressed.
Circumstances may arise in which it is necessary for us to modify our opinion or withdraw from
the engagement.

The Uniform Guidance requires that we also plan and perform the audit to obtain reasonable
assurance about whether the City has complied with applicable laws and regulations and the
provisions of contracts and grant agreements applicable to major federal award programs. Our
procedures will consist of determining major federal programs and performing the applicable
procedures described inthe U.S. Office of Management and Budget OMB Compliance Supplement

for the types of compliance requirements that could have a direct and material effect on each of
the City’s major programs. The purpose of those procedures will be to express an opinion on the
City’s compliance with requirements applicable to each of its major programs in our report on
compliance issued pursuant to the Uniform Guidance.

Also, as required by the Uniform Guidance, 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 of the City’s
major federal award programs. However, our tests will be less in scope than would be necessary
to render an opinion on thease controls and, accordingly, no opinion will be expressed in our
report,

We will issue a report on compliance that will include an opinion or disclaimer of opinion regarding
the City’s major federal award programs, and a report on internal controls over compliance that
will report any significant deficiencies and material weaknesses identified; however, such report
will not express an opinion on internal control.

Schedule of Expenditures of Federal Awards

We will subject the schedule of expenditures of federal awards to the auditing procedures applied
in our audit of the basic financial statements and certain additional procedures, including comparing
and reconciling the schedule to the underlying accounting and other records used to prepare the
financial statements or to the financial statements themselves, and additional procedures in
accordance with auditing standards generally accepted in the United States of America. We intend to
provide an opinion on whether the schedule of expenditures of federal awards is presented fairly
in all material respects in relation to the financial statements as a whole.

Data Collection Form

Prior to the completion of our engagement, we will complete the sections of the Data Collection
Form that are our responsibility. The form will summarize our audit findings, amounts and conclu+
sions. It is management’s responsibility to submit a reporting package including financial statements,
schedule of expenditure of federal awards, summary schedule of prior audit findings and corrective
action plan along with the Data Collection Form to the federal audit clearinghouse. The financial
reporting package must be text searchable, unencrypted, and unlocked. Otherwise, the reporting
package will not be accepted by the federal audit clearinghouse. We will assist you in the electronic
submission and certification. You may request from us copies of our report for you to include with
the reporting package submitted to pass-through entities.

The Data Collection Form is required to be submitted within the earlier of 30 days after receipt of
our auditors’ reports or nine months after the end of the audit period, unless specifically waived
by a federal cognizant or oversight agency for audits. Data Collection Forms submitted untimely
are one of the factors in assessing programs at a higher risk.

Management Responsibilities

Our audit will be conducted on the basis that management acknowledges and understands that
they have responsibility:

a. For the preparation and fair presentation of the 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, For identifying all federal awards expended during the period including federal awards and
funding increments received prior to December 26, 2014, and those received in accordance
with the Uniform Guidance generally received after December 26, 2014.

d. For preparing the schedule of expenses of federal awards {including notes and noncash
assistance received} in accordance with the Uniform Guidance requirements.

e. For the design, implementation, and maintenance of internal control over compliance.

f. 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.

g. For addressing the findings and recommendations of auditors, for establishing and main-
taining 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. .

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

i. For submitting the reporting package and data collection form to the appropriate parties.

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

k. To provide us with:

i. Access to all information of which management is aware that is relevant to the prep-
aration and fair presentation of the financial statements such as records, documen-
tation, and other matters.

ii. Additional information that we may request from management for the purpose of
the audit.

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

|. For including the auditor’s report in any document containing financial statements that
indicates that such financiai statements have been audited by the City’s auditor.

m. For identifying and ensuring that the City complies with laws, regulations, grants, and
contracts applicable to its activities and its federal award programs and implementing
systems designed to achieve compliance with applicable laws, regulations, grants, and con-
tracts applicable to activities and its federal award programs.

n. For adjusting the financial statements to correct material misstatements and confirming to us
in the management representation letter that the effects of any uncorrected misstate-
ments 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.

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

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

With regard to the supplementary information referred to above, you acknowledge and under-
stand 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 af 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.

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 the Mayor and Board of Aldermen of the City. We cannot provide
assurance that unmodified opinions will be expressed. Circumstances may arise in which it is
necessary for us to modify our opinions, add an emphasis-of-matter or other-matter paragraphs,
or withdraw from the 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.

Provisions of Engagement Administration, Timing, and Fees

During the course of the engagement, we may communicate with you or your personnel via fax
or e-mail, and you should be aware that communication in those mediums contains a risk of
misdirected or intercepted communications.

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

Our fees are based on the amount of time required at various levels of responsibility, plus actual
out-of-pocket expenses. Invoices will be rendered monthly and are payable upon presentation.
Our fees for audit services for June 30, 2020 - 2021 will be $122,500 and $125,000, respectively.

We will notify you immediately of any circumstances we encounter that could significantly affect
this initial fee estimate. Whenever possible, we will attempt to use the City’s personnel to assist
in the preparation of schedules and analyses of accounts. This effort could substantially reduce
our time requirements and facilitate the timely conclusion of the audit. Further, we will be
available during the year to consult with you on financial management and accounting matters
of a routine nature.

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.

Other Services

We will assist in compiling the financial statements, including note disclosures, and preparing the
government-wide financial statements (by consolidating various funds into governmental activities,
and recording all long-term assets, long-term liabilities, and net position classifications from infor-
mation provided by the City}.

We will also assist in the compilation of the following information based on information gathered
during the audit process:

e Management’s Discussion and Analysis

e Data Collection Form

With respect to any nonattest services we perform, which may include assistance with the com-
pilation of financial statements, 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;

« If aggregate limits of less than $2,000,000 are imposed on bodily injury and property damage,
Contractor must maintain umbrella liability insurance of at least $1,000,000. All aggregates
must be fully disclosed on the required certificate of insurance.

« The specified insurance requirements do not relieve Contractor of its responsibilities or limit the
amount of its liability to the City or other persons, and Contractor is encouraged to purchase
such additional insurance, as it deems necessary.

« The insurance provided herein is primary, and no insurance held or owned by the City of Nashua
shall be called upon to contribute to a loss caused by Contractor.

* Contractor is responsible for and required to remedy all damage or loss to any property,
including property of the City, caused in whole or part by Contractor or anyone employed,
directed, or supervised by Contractor.

Regardless of any coverage provided by any insurance, Contractor agrees to indemnify and shall defend
and hold harmless the City, its agents, officials, employees and authorized representatives and their
employees from and against any and all suits, causes of action, legal or administrative proceedings,
arbitrations, claims, demands, damages, liabilities, interest, attorney’s fees, costs and expenses of any
kind or nature in any manner caused, occasioned, or contributed to in whole or in part by reason of any
negligent act, omission, or fault or willful misconduct, whether active or passive, of Contractor or of
anyone acting under its direction or control or on its behalf in connection with or incidental to the
performance of this contract. Contractor’s indemnity, defense and hold harmless obligations, or portions
thereof, shall not apply to liability caused by the sole negligence or willful misconduct of the party
indemnified or held harmless.

15

(d} evaluating and accepting responsibility for the results of the services performed; and
(e) establishing and maintaining internal controls, including monitoring ongoing activities.

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 auditor 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.

Other Matters

We understand that your employees will locate any documents or support for any other trans-
actions we select for testing.

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.

If you intend to publish or otherwise reproduce the financial statements and make reference to
our firm, you agree to provide us with printers’ proofs or masters for our review and approval
before printing. You also agree to provide us with a copy of the final reproduced material for our
approval before it is distributed.

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.

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.

We agree to retain our audit documentation or work papers for a period of at least five years from
the date of our report.

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

a. Our view about the qualitative aspects of the City’s significant accounting practices.