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ey, THE CITY OF NASHUA “The Cate City’

Financial Services Division

Office of the Chief Financial Officer

TO: Mayor James Donchess

FROM: John L. Griffin and Rosemarie Evans

DATE: April 11, 2018

RE: Recommendation to Extend Melanson Heath & Company
Contract

The purpose of this communication is to recommend extending the existing
contract with Melanson Heath & Company for services to audit the City’s
general-purpose financial statements and schedules for one fiscal year (FY2018)
with an option to renew for an additional one fiscal year period (FY2019). The
contract amount is $120,000 for each year.

During the past several years, this firm has provided audit services for the City’s new
Lawson Financial Systems including General Ledger, Payroll, Accounts Payable,
Procurement, Cash Receipts and Fixed Assets. The familiarity that the incumbent has
with the former ADMINS system has proven to be most helpful.

As the City continues to convert several of its critical legacy systems from ADMINS to
newer systems, the institutional knowledge of the audit firm of the systems is
important. MUNIS software property tax billing was successfully implemented last year
and utility billing for sewer billing is in its early stages of implementation.

In summary, given the migration of these financial systems over the next two years, it is
important to maintain the services from the incumbent external auditor — Melanson
Heath & Company for continuity purposes.

229 Main Street e Nashua, New Hampshire 03060 e Phone (603) 589-3173 e Fax (603) 589-3168

City of Nashua

Purchasing Department

Administrative Services Division (603) 589-3330
229 Main Street - Nashua, NH 03060 Fax (603) 594-3233
August 10, 2022
Memo #23-319
TO: Mayor Donchess
Finance Committee
SUBJECT: Motorcycles in the amount not to exceed $44,090 funded from 81500 Vehicles/CERF

Please see attached communications from Karen Smith, Buisiness Office Manager, dated July 25, 2022 for
project specific details related to this purchase. Below please find a summary of the purchase approval
request:

Item: Two 2022 Harley Davidson FLHTP Motorcycles
Value: $44,090
Vendor: Seacoast Harley Davidson

Department: 150 Police Department
Source Fund: 81500 Vehicles/ CERF

Ordinance: Pursuant to § 5-84 Special purchase procedures A/(3) Purchases which can be procured
through cooperative intergovernmental purchase agreements with other governmental jurisdictions

Nashua Police Department, and the Purchasing Department respectfully request your approval of this
contract.

Regards,

Amy Girard

Purchasing Manager

Cc: K Smith
K Kleiner

MELANSONI|sIo ie

ACCOUNTANTS * AUDITORS

10? Perimeter Road

Nashua, NH 03063
March 29, 2018 (603)882-1111

melansonheath.com

Additional Offices:

Mr, John Griffin Andover, MA

Chief Financial Officer Greenfield, MA
. 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 as of June 30, 2018 and 2019 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, 2018 and 2019. 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 man-
agement'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 management 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. The following RSI is required by accounting principles
generally accepted in the United States of America. This RSI will be subjected to certain
limited procedures but will not be audited:

Management's Discussion and Analysis

Schedule of Funding Progress — Other Post-Employment Benefits
Employer’s Schedule of Proportionate Share of the Net Pension Liability
Schedule of Contributions

Schedule of Changes in Net Pension Liability

e Schedule of New Pension Liability
« Schedule of Contributions
e Schedule of Investment Returns

Supplementary information other than RSI will accompany the Town/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 ana 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 supplementary information in relation to the financial statements
as a whole.

Also, the document we submit to you will include the introductory and statistical sections
that will not be subjected to the auditing procedures applied in our audit of the financial
statements. As part of our engagement, we will apply certain limited procedures to the
introductory and statistical sections. These limited procedures will consist primarily of
inquiries of management 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 introductory and
statistical sections.

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 conclusions. 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 certifica-
tion. 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 Gi 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.

The Objective of an Audit

The objective of our audit is the expression of opinions as to whether your basic financial
statements are fairly presented, in all material respects, in accordance with generally
accepted accounting principles and to report on the fairness of the supplementary infor-
mation 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 opin-
ions. We cannot provide assurance that unmodified opinions will be expressed. Circum-
stances may arise in which it is necessary for us to modify our opinions or add emphasis-
of-matter 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 con-
tained 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 misstatement. An audit involves perform-
ing 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 statements, whether due
to error, fraudulent financial reporting, misappropriation of assets, or violations of laws, gov-
ermnmental regulations, grant agreements, or contractual agreements. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.

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

3

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 prep-
aration and fair presentation of the financial statements in order to design audit proce-
dures 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 June 30, 2018 and 2019 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 reason-
able 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 in the U.S. Office of Management and
Budget OMB Compliance Supplement for the types of compliance requirements that
couid have a direct ana 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 these 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.

Management Responsibilities

Our audit will be conducted on the basis that management acknowledges and under-
stands 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.

For the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material
misstatement, whether due to error, fraudulent financial reporting, misappropria-
tion of assets, or violations of laws, governmental regulations, grant agreements,
or contractual agreements.

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.

For preparing the schedule of expenses of federal awards (including notes and non-
cash assistance received) in accordance with the Uniform Guidance requirements.

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

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

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.

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

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

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

To provide us with:

i. Access to all information of which management is aware that is relevant to the
preparation and fair presentation of the financial statements such as records,
documentation, and other matters.

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

iii. 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 financial 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 imple-
menting systems designed to achieve compliance with applicable laws, regula-
tions, grants, and contracts applicable to activities and its federal award programs.

n. For adjusting the financial statements to correct material misstatements and con-
firming to us in the management representation letter that the effects of any uncor-
rected 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.

o. For maintaining adequate records, selecting and applying accounting principles, and
safeguarding assets.

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

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 sup-
plementary 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 supplemen-
tary 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.

Reporting

We will issue a written report upon completion of our audit of the City’s June 30, 2018 and
2019 basic financial statements. Our report will be addressed to those charged with
governance 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 finan-
cial 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.

Scott C. Mclntire, CPA, is the engagement officer for the audit services specified in this
letter. Those responsibilities include supervising the City’s services periormed 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 the years ended June 30, 2018 and 2019 will
be $120,000 and $120,000, 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.

Other Matters

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

If you intend to publish or otherwise reproduce the financial statements and make refer-
ence 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 repro-
duced 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 appro-
priate level of management, 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 consid-
eration 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.

Significant difficulties, if any, encountered during the audit.
Uncorrected misstatements, other than those we believe are trivial, if any.
Disagreements with management, if any.

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.

ono &

f. Material, corrected misstatements that were brought to the attention of manage-
ment as a result of our audit procedures.

g. Representations we requested from management.
h. Management's consultations with other accountants, if any.

i. Significant issues, if any, arising from the audit that were discussed, or the subject
of correspondence, with management.

The audit documentation for this engagement is the property of Melanson Heath 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 Heath'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.

Please sign and return a copy of this letter to indicate your acknowledgment of, and agree-
ment with, the arrangements for our audit of the financial statements including our respec-
tive responsibilities.

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

Respectfully,

Ses C WAL

Scott C. McIntire, CPA
Vice President