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provisions of contracts and grant agreements applicable to major federal award programs, and
the applicable compliance requirements occurred, whether due to fraud or error, and express an
opinion on the City’s compliance based on the audit. Reasonable assurance is a high level of
assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted
in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always
detect material noncompliance when it exists. The risk of not detecting material noncompliance
resulting from fraud is higher than for that resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements is considered material if there is a substantial
likelihood that, individually or in the aggregate, it would influence the judgment made by a
reasonable user of the report on compliance about the City’s compliance with the requirements
of the federal programs as a whole.
As part of a compliance audit in accordance with GAAS and in accordance with Government
Auditing Standards, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also identify and assess the risks of material noncompliance, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
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 could have a direct and material effect
on each of the City’s major programs, and performing such other procedures as we consider
necessary in the circumstances. 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.
As also required by the Uniform Guidance, we will obtain an understanding of the City’s internal
control over compliance relevant to the audit in order to design and 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. 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. However, we will communicate to you, regarding, among other matters, the
planned scope and timing of the audit and any significant deficiencies and material weaknesses
in internal control over compliance that we have identified during the audit.
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.
800.282.2440 | melansoncpas.com
