HomeMy WebLinkAboutR-2022-023 Engagement Letter with McGladrey LLP (RSM) for External Auditing Services RESOLUTION NO. R-2022-023
A RESOLUTION APPROVING AN ENGAGEMENT LETTER WITH MCGLADREY LLP
(RSM) FOR EXTERNAL AUDITING SERVICES
BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF RIVERSIDE,
MISSOURI AS FOLLOWS:
THAT the Riverside Board of Aldermen hereby approves the engagement letter with
McGladrey LLP (RSM) for external auditing services, a copy of which is attached hereto, and
further authorizes the Mayor to sign the letter on behalf of the City; and
FURTHER THAT the Mayor, the City Administrator, the Finance Director and other
appropriate City officials are hereby authorized to take any and all actions as may be deemed
necessary or convenient to carry out and comply with the intent of this Resolution and to execute
and deliver for and on behalf of the City all certificates, instruments, agreements and other
documents, as may be necessary or convenient to perform all matters herein authorized.
PASSED AND ADOPTED by the Board of Aldermen of the City of Riverside,
Missouri,the / day of Y}'ct,4 ( , 2022.
ehi-LIPO _J
M or Kathleen L. Rose
ATTEST:
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Robin Kincaid, City Clerk
RSM
March 7, 2022 RSMUSLLP
4622 Pennsylvania Ave
Suite 1100
Board of Aldermen Kansas City. MO 64112
City of Riverside, Missouri
City Hall T+1 816 753 3000
2950 N.W. Vivion Road F+1 816 751 1890
Riverside, MO 64150 www.rsmus.com
Attention: Brian Koral, City Administrator
Nate Blum, Finance Director
The Objective and Scope of the Audit of the Financial Statements
You have requested that RSM US LLP ("RSM", "we", "us", or"our"), audit the City of Riverside, Missouri's
(the City) governmental activities, each major fund, aggregate remaining fund information, the budgetary
comparison and supplementary information as of and for the year ending June 30, 2022, which
collectively comprise the basic financial statements. We are pleased to confirm our acceptance and our
understanding of this audit engagement by means of this letter("Arrangement Letter").
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's
report that includes our opinion. 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 auditing
standards generally accepted in the United States of America (GAAS) and Government Auditing
Standards issued by the Comptroller General of the United States (GAS)will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if
there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment
made by a reasonable user based on the financial statements. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
The Responsibilities of the Auditor
We will conduct our audit in accordance with GAAS and GAS. Those standards require that we comply
with applicable ethical requirements. As part of an audit in accordance with GAAS and GAS, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
• Obtain an understanding of internal control relevant to the audit 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.
THE POWER OF BEING UNDERSTOOD
AUDIT I TAXI CONSULTING
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City of Riverside, Missouri
March 7, 2022
Page 2
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Conclude, based on the audit evidence obtained, whether there are conditions or events, considered
in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern
for a reasonable period of time.
Because of the inherent limitations of an audit, together with the inherent limitations of internal control, an
unavoidable risk that some material misstatements may not be detected exists, even though the audit is
properly planned and performed in accordance with GAAS and GAS. Because the determination of waste
or abuse is subjective, GAS does not require auditors to perform specific procedures to detect waste or
abuse in financial statement audits.
We will communicate to the Board of Aldermen (a) any fraud involving senior management and fraud
(whether caused by senior management or other employees)that causes a material misstatement of the
financial statements that becomes known to us during the audit, and (b) any instances of noncompliance
with laws and regulations that we become aware of during the audit(unless they are clearly
inconsequential).
Our report on internal control will include any significant deficiencies and material weaknesses in controls
of which we become aware as a result of obtaining an understanding of internal control and performing
tests of internal control consistent with requirements of the standards and regulations identified above.
Our report on compliance matters will address material errors, fraud, violations of compliance obligations,
and other responsibilities imposed by state and federal statutes and regulations or assumed by contracts;
and any state or federal grant, entitlement or loan program questioned costs of which we become aware,
consistent with requirements of the standards and regulations identified above.
We will maintain our independence in accordance with the standards of the American Institute of Certified
Public Accountants and GAS.
The Responsibilities of Management and Identification of the Applicable Financial Reporting
Framework
Management is responsible for:
1. Identifying and ensuring that the City complies with the laws and regulations applicable to its
activities, and for informing us about all known violations of such laws or regulations, other than those
that are clearly inconsequential;
2. The design and implementation of programs and controls to prevent and detect fraud, and for
informing us about all known or suspected fraud affecting the City involving management, employees
who have significant roles in internal control, and others where the fraud could have a material effect
on the financial statements; and
3. Informing us of its knowledge of any allegations of fraud or suspected fraud affecting the City
received in communications from employees, former employees, analysts, regulators, short sellers,
vendors, customers or others.
City of Riverside, Missouri
March 7, 2022
Page 3
Management is responsible for the preparation of the required supplementary information which
accounting principles generally accepted in the United States of America (U.S. GAAP) require to be
presented to supplement the basic financial statements. Management is also responsible for the
preparation of the supplementary information presented in relation to the financial statements as a whole
in accordance with U.S. GAAP and the Governmental Accounting Standards Board. Management agrees
to include the auditor's report on the supplementary information in any document that contains the
supplementary information and indicates that the auditor has reported on such supplementary
information. Management also agrees to present the supplementary information with the audited financial
statements or, if the supplementary information will not be presented with 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 of the supplementary information and the auditor's report
thereon.
The Board of Aldermen is responsible for informing us of its views about the risks of fraud, waste or
abuse within the City, and its knowledge of any fraud, waste or abuse or suspected fraud, waste or abuse
affecting the City.
Our audit will be conducted on the basis that management and, when appropriate, those charged with
governance acknowledge and understand that they have responsibility:
1. For the preparation and fair presentation of the financial statements in accordance with accounting
principles generally accepted in the United States of America (U.S. GAAP);
2. To evaluate subsequent events through the date the financial statements are issued or available to
be issued, and to disclose the date through which subsequent events were evaluated in the financial
statements. Management also agrees that it will not conclude on subsequent events earlier than the
date of the management representation letter referred to below;
3. 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
fraud or error;
4. For establishing and maintaining effective internal control over financial reporting, and for informing
us of all significant deficiencies and material weaknesses in the design or operation of such controls
of which it has knowledge;
5. For report distribution; and
6. To provide us with:
a. Access to all information of which management is aware that is relevant to the preparation and
fair presentation of the financial statements including information relevant to disclosures;
b. Draft financial statements, including information relevant to their preparation and fair presentation,
when needed, to allow for the completion of the audit in accordance with the proposed timeline;
c. Additional information that we may request from management for the purpose of the audit; and
d. Unrestricted access to persons within the City from whom we determine it necessary to obtain
audit evidence.
City of Riverside, Missouri
March 7, 2022
Page 4
As part of our audit process, we will request from management written confirmation concerning
representations made to us in connection with the audit, including among other items:
1. That management has fulfilled its responsibilities as set out in the terms of this Arrangement Letter;
and
2. That it believes 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.
Reporting
We will issue a written report upon completion of our audit of the City's financial statements. Our report
will be addressed to the Honorable Mayor and Members of the Board of Aldermen 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 opinion or add an emphasis-of-matter paragraph or other-matter paragraph to our auditor's
report.
If circumstances arise relating to the condition of the City's records, the availability of appropriate audit
evidence or indications of a significant risk of material misstatement of the financial statements because
of error, fraudulent financial reporting or misappropriation of assets which, in our professional judgment,
prevent us from completing the audit or forming an opinion, we retain the unilateral right to take any
course of action permitted by professional standards, including, but not limited to, declining to express an
opinion or issue a report, or withdrawing from the engagement.
You have informed us that you desire us to issue a report on the financial statements of the City as of and
for the year ended June 30, 2022 conforming only to the requirements of auditing standards generally
accepted in the United State of America. This reporting will not be used for purposes to comply with a
requirement calling for an audit in accordance with Government Auditing Standards.
In addition to our report on the City's financial statements, we will also issue the following reports:
1. Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on
an Audit of Financial Statements Performed in Accordance with GAS;
Records and Assistance
During the course of our engagement, we may accumulate records containing data that should be
reflected in the City's books and records. The City will determine that all such data, if necessary, will be
so reflected. Accordingly, the City will not expect us to maintain copies of such records in our possession.
The assistance to be supplied by City personnel, including the preparation of schedules and analyses of
accounts, has been discussed and coordinated with Nate Blum, Finance Director. The timely and
accurate completion of this work is an essential condition to our completion of the audit and issuance of
our audit report.
Nonaudit Services
In connection with our audit, you have requested us to perform certain nonaudit services:
1. Printing and binding of the financial statements
City of Riverside, Missouri
March 7, 2022
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GAS independence standards require that the auditor maintain independence so that opinions, findings,
conclusions,judgments and recommendations will be impartial and viewed as impartial by reasonable
and informed third parties. Before we agree to provide a nonaudit service to the City, we determine
whether providing such a service would create a significant threat to our independence for GAS audit
purposes, either by itself or in aggregate with other nonaudit services provided. A critical component of
our determination is consideration of management's ability to effectively oversee the nonaudit services to
be performed. The City has agreed that Nate Blum, Finance Director possesses suitable skill, knowledge
or experience and that the individual understands the printing and binding of the financial statements
services to be performed sufficiently to oversee them. Accordingly, the management of the City agrees to
the following:
1. The City has designated Nate Blum, Finance Director as a senior member of management who
possesses suitable skill, knowledge and experience to oversee the services;
2. Nate Blum, Finance Director will assume all management responsibilities for subject matter and
scope of the printing and binding of the financial statements;
3. The City will evaluate the adequacy and results of the services performed; and
4. The City accepts responsibility for the results and ultimate use of the services.
GAS further requires that we establish an understanding with the City's management and those charged
with governance of the objectives of the nonaudit services, the services to be performed, the City's
acceptance of its responsibilities, the auditor's responsibilities and any limitations of the nonaudit
services. We believe this Arrangement Letter documents that understanding.
Parties' Understandings Concerning Situation Around COVID-19
RSM and the City acknowledge that, at the time of the execution of this Arrangement Letter, federal, state
and local governments, both domestic and foreign, have imposed certain restrictions on travel and/or the
movement of their citizens due to the ongoing and evolving situation around COVID-19. In addition, like
many organizations and companies in the United States and around the globe, RSM has restricted its
employees from certain travel and onsite work, whether at a client facility or RSM facility, to protect the
health of both RSM's and its clients' employees. Accordingly, to the extent that any of the services
described in this Arrangement Letter requires or relies on RSM or City personnel to travel and/or perform
work onsite, either at the City's or RSM's facilities, including, but not limited to, maintaining business
operations and/or IT infrastructure, RSM and the City acknowledge and agree that the performance of
such work may be delayed, significantly or indefinitely, and thus certain services described herein may
need to be rescheduled and/or suspended at either RSM's or the City's sole discretion. RSM and the City
agree to provide the other with prompt written notice(email will be sufficient) in the event any of the
services described herein will need to be rescheduled and/or suspended. RSM and the City also
acknowledge and agree that any delays or workarounds due to the situation surrounding COVID-19 may
increase the cost of the services described herein. Costs also may increase if services provided include
matters such as consideration of going concern, impairment analysis, debt forgiveness or lease
concessions, not already considered within the stated fees. RSM will obtain the City's prior written
approval (email will be sufficient)for any increase in the cost of RSM services that may result from the
situation surrounding COVID-19.
Other Relevant Information
In accordance with GAS, a copy of our most recent peer review report is enclosed for your information.
City of Riverside, Missouri
March 7, 2022
Page 6
Fees and Costs
Our fees for the services described above are based upon the value of the services performed and the
time required by the individuals assigned to the engagement, including direct expenses, including report
processing, travel, meals, and fees for services from other professionals. Our fee for the services
described in this letter are estimated to be $31,450, as well as a charge of 5% of fees for all other
expenses, including indirect administrative expenses such as technology, research and library databases,
communications, photocopying, postage and clerical assistance. Our fee estimate and completion of our
work are based upon the following criteria:
1. Anticipated cooperation from City personnel
2. Timely responses to our inquiries
3. Timely completion and delivery of client assistance requests
4. Timely communication of all significant accounting and financial reporting matters
5. The assumption that unexpected circumstances will not be encountered during the engagement
If any of the aforementioned criteria are not met, then fees may increase. Interim billings will be submitted
as work progresses and as expenses are incurred. Billings are due upon submission.
You have informed us that you intend to prepare an annual comprehensive financial report (Annual
Report) and submit it for evaluation by the Government Finance Officers Association's Certificate of
Achievement for Excellence in Financial Reporting Program. Our association with the Annual Report is to
consist of technical review for compliance with the program requirements.
Use of Subcontractors and Third-Party Products
From time to time and depending upon the circumstances, we may, in our sole discretion, use affiliates of
ours or qualified third-party service providers, located within or outside the United States, to assist us in
providing professional services to you. In such circumstances, it may be necessary for us to disclose
Confidential Information (as such term is defined below)to them. In addition, if necessary to perform the
services requested, we may arrange for one or more of the member firms of the RSM International
Network(each an "RSM International Network Firm")to provide services to you outside of the United
States. Those third-party service providers, affiliates of RSM, and RSM International Network Firms we
use to assist us in providing services to you are collectively referred to herein as"Subcontractors."You
hereby consent to us sharing your information, including Confidential Information, with our Subcontractors
on the same basis as we would be permitted to share information with one of our employees; provided
that such recipients are bound by written obligations of confidentiality that are as protective of your
Confidential Information as the confidentiality terms set forth herein. You acknowledge and agree that:
(i) our use of Subcontractors may involve the processing, input, disclosure, movement, transfer, and
storage of your information and data outside of our technology infrastructure; and (ii) an RSM
International network Firm may also share with us any work product, time and billing information, or any
other information concerning you or your affiliates reasonably necessary for us to perform the services
requested under this Arrangement Letter.
City of Riverside, Missouri
March 7, 2022
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We also may provide services to you using certain third-party hardware, software, software services,
managed services (including, but not limited to, web hosting, data security, data back-up, email security,
or similar services subject to direct end-user or subscription agreements), applications, and equipment
(collectively, "Third-Party Products"). You acknowledge that your or our use of a Third-Party Product may
involve the processing, input, disclosure, movement, transfer, and storage of information provided by you
to us, including Personal Information and Confidential Information, within the Third-Party Product's
infrastructure and not ours, and that the terms of use and service set forth in the end-user license,
subscription, or other agreement with the licensor of such Third-Party Product, including, but not limited
to, applicable laws, will govern all obligations of such licensor relating to data privacy, storage, recovery,
security, and processing within such Third-Party Product's infrastructure, as well as, the service levels
associated with such Third-Party Product. You hereby consent to the disclosure of your information,
including your Confidential Information and Personal Information, to the licensors of such Third-Party
Products for the purpose described herein.
You acknowledge that your or our use of Third-Party Products may be subject to limitations, delays,
interruptions, errors, and other problems which are beyond our control, including, without limitation,
internet outage or lack of availability related to updates, upgrades, patches, fixes, maintenance, or other
issues. We will not be liable for any delays, delivery failures, or other losses or damages resulting from
such issues. Nor will we be held responsible or liable for any loss, or unauthorized use or disclosure, of
any information or data provided by you, including, without limitation, Personal Information provided by
you, resulting from your or our use of a Third-Party Product.
Use and Ownership; Access to Audit Documentation
The Audit Documentation for this engagement is the property of RSM. For the purposes of this
Arrangement Letter, the term "Audit Documentation" shall mean the confidential and proprietary records
of RSM's audit procedures performed, relevant audit evidence obtained, other audit-related workpapers,
and conclusions reached. Audit Documentation shall not include custom-developed documents, data,
reports, analyses, recommendations, and deliverables authored or prepared by RSM for the City under
this Arrangement Letter, or any documents belonging to the City or furnished to RSM by the City.
Review of Audit Documentation by a successor auditor or as part of due diligence is subject to applicable
RSM policies, and will be agreed to, accounted for and billed separately. Any such access to our Audit
Documentation is subject to a successor auditor signing an Access&Release Letter substantially in RSM's
form. RSM reserves the right to decline a successor auditor's request to review our workpapers.
In the event we are required by government regulation, subpoena or other legal process to produce our
documents or our personnel as witnesses with respect to our engagement for the City, the City will, so
long as we are not a party to the proceeding in which the information is sought, reimburse us for our
professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding
to such requests.
You acknowledge and grant your assent that representatives of the cognizant or oversight agency or their
designee, other government audit staffs, and the U.S. Government Accountability Office shall have
access to the Audit Documentation upon their request and that we shall maintain the Audit
Documentation for a period of at least three years after the date of the report, or for a longer period if we
are requested to do so by the cognizant or oversight agency. Access to the requested Audit
Documentation will be provided under the supervision of RSM audit personnel and at a location
designated by our firm.
City of Riverside, Missouri
March 7, 2022
Page 8
Indemnification, Limitation of Liability, and Claim Resolution
Because RSM will rely on the City and its management and Board of Aldermen to discharge the foregoing
responsibilities, the City agrees to indemnify, hold harmless and release RSM and its partners, principals,
officers, directors, employees, affiliates, subsidiaries, contractors, Subcontractors, agents,
representatives, successors, or assigns from all claims, liabilities, losses and costs arising in
circumstances where there has been a knowing misrepresentation by a member of the City's
management.
THE CITY AND RSM AGREE THAT NO CLAIM ARISING OUT, FROM, OR RELATING TO THE
SERVICES RENDERED PURSUANT TO THIS ARRANGEMENT LETTER SHALL BE FILED MORE
THAN TWO YEARS AFTER THE DATE OF THE AUDIT REPORT ISSUED BY RSM OR THE DATE OF
THIS ARRANGEMENT LETTER IF NO REPORT HAS BEEN ISSUED. IN NO EVENT SHALL RSM OR
THE CITY, OR ANY OF THEIR RESPECTIVE PARTNERS, PRINCIPALS, OFFICERS, DIRECTORS,
EMPLOYEES,AFFILIATES, SUBSIDIARIES, CONTRACTORS, SUBCONTRACTORS, AGENTS,
REPRESENTATIVES, SUCCESSORS, OR ASSIGNS (COLLECTIVELY, THE "COVERED PARTIES"
AND EACH INDIVIDUALLY, A "COVERED PARTY"), BE LIABLE FOR THE INTERRUPTION OR
LOSS OF BUSINESS,ANY LOST PROFITS, SAVINGS, REVENUE, GOODWILL, SOFTWARE,
HARDWARE, OR DATA, OR THE LOSS OF USE THEREOF (REGARDLESS OF WHETHER SUCH
LOSSES ARE DEEMED DIRECT DAMAGES), OR INCIDENTAL, INDIRECT, PUNITIVE,
CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR SIMILAR SUCH DAMAGES, EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. TO THE FULLEST EXTENT PERMITTED BY LAW, THE
TOTAL AGGREGATE LIABILITY OF THE COVERED PARTIES ARISING OUT OF, FROM, OR
RELATING TO THIS ARRANGEMENT LETTER, OR THE REPORT ISSUED OR SERVICES
PROVIDED HEREUNDER, REGARDLESS OF THE CIRCUMSTANCES OR NATURE OR TYPE OF
CLAIM, INCLUDING,WITHOUT LIMITATION, CLAIMS ARISING FROM A COVERED PARTY'S
NEGLIGENCE OR BREACH OF CONTRACT OR WARRANTY, OR RELATING TO OR ARISING
FROM A GOVERNMENT, REGULATORY OR ENFORCEMENT ACTION, INVESTIGATION,
PROCEEDING, OR FINE, WILL NOT EXCEED THE TOTAL AMOUNT OF THE FEES PAID BY THE
CITY TO RSM UNDER THIS ARRANGEMENT LETTER. NOTWITHSTANDING THE FOREGOING,
NOTHING IN THIS LIMITATION OF LIABILITY PROVISION SHALL, OR SHALL BE INTERPRETED
OR CONSTRUED TO, RELIEVE THE CITY OF ITS PAYMENT OBLIGATIONS TO RSM UNDER THIS
ARRANGEMENT LETTER.
Confidentiality
RSM and the City may, from time to time, disclose Confidential Information (as defined below)to one
another.Accordingly, RSM and the City agree as the recipient of such Confidential Information (the
"Receiving Party") to keep strictly confidential all Confidential Information provided to it by the disclosing
party (the"Disclosing Party") and use, modify, store, and copy such Confidential Information only as
necessary to perform its obligations and exercise its rights under this Arrangement Letter and for no other
purpose or use. Except as otherwise set forth herein, the Receiving Party may only disclose the
Confidential Information of the Disclosing Party to its personnel, agents, and representatives who are
subject to obligations of confidentiality at least as restrictive as those set forth herein and only for the
purpose of exercising its rights and fulfilling its obligations hereunder. To avoid any doubt, RSM is
permitted to disclose the City's Confidential Information to RSM's personnel, agents, and representatives
for the purpose of maintaining compliance with applicable laws and professional, regulatory, and/or
ethical standards.
City of Riverside, Missouri
March 7, 2022
Page 9
As used herein, "Confidential Information" means, information in any form, oral, graphic, written,
electronic, machine-readable or hard copy consisting of: (i) any nonpublic information provided by the
Disclosing Party, including, but not limited to, all of its inventions, designs, data, source and object code,
programs, program interfaces, know-how, trade secrets, techniques, ideas, discoveries, marketing and
business plans, pricing, profit margins and/or similar information; (ii) any information that the Disclosing
Party identifies as confidential; or(iii) any information that, by its very nature, a person in the same or
similar circumstances would understand should be treated as confidential, including, but not limited to,
this Arrangement Letter.
As used herein, the term "Confidential Information"will not include information that: (i) is publicly available
at the time of disclosure by the Disclosing Party; (ii) becomes publicly available by publication or
otherwise after disclosure by the Disclosing Party, other than by breach of the confidentiality obligations
set forth herein by the Receiving Party; (iii)was lawfully in the Receiving Party's possession, without
restriction as to confidentiality or use, at the time of disclosure by the Disclosing Party; (iv) is provided to
the Receiving Party without restriction as to confidentiality or use by a third party without violation of any
obligation to the Disclosing Party; or(v) is independently developed by employees or agents of the
Receiving Party who did not access or use the Confidential Information.
The Receiving Party will treat the Disclosing Party's Confidential Information with the same degree of care
as the Receiving Party treats its own confidential and proprietary information, but in no event will such
standard of care be less than a reasonable standard of care. The Receiving Party will promptly notify the
Disclosing Party if it becomes aware that any of the Confidential Information of the Disclosing Party has
been used or disclosed in violation of this Arrangement Letter.
Notwithstanding the foregoing, in the event that the Receiving Party becomes legally compelled to
disclose any of the Confidential Information of the Disclosing Party, or as may be required by applicable
regulations or professional standards, the Receiving Party will use commercially reasonable efforts to
provide the Disclosing Party with notice prior to disclosure, to the extent permitted by law.
Preexisting Nondisclosure Agreements
In the event that the parties have executed a separate nondisclosure agreement and such agreement
does not automatically terminate or expire upon execution of this Arrangement Letter, such agreement
shall be terminated as of the effective date of this Arrangement Letter.
Data Protection Compliance
Our Privacy Policy ("Privacy Policy") is located on our website at https://rsmus.com/who-we-are/privacv-
policy.html. Our Privacy Policy may be amended from time to time in our sole discretion and without prior
notice, and is hereby incorporated by reference into this Arrangement Letter. You acknowledge that you
have read and understand the Privacy Policy and agree to the practices as described therein.
We take reasonable steps to comply with all applicable privacy, cybersecurity, and data protection laws
that may apply to Personal Information and Confidential Information we process on behalf of our clients.
Upon written request, but not more than annually during the term of this Arrangement Letter, we will
deliver to you a copy of our third-party provided SOC 2 report evidencing the operating effectiveness of
our Information Technology ("IT") control environment. We will also provide summaries of our IT security
and disaster recovery policies and make our senior IT personnel reasonably available for discussion upon
request. Our SOC 2 report and any information we disclose to you concerning our IT control environment
shall constitute Confidential Information of RSM and shall be subject to the confidentiality obligations set
forth in this Arrangement Letter.
City of Riverside, Missouri
March 7, 2022
Page 10
Prior to disclosing to us or our Subcontractors or granting us or our Subcontractors with access to your
data, you will identify in writing any personal, technical, or other data provided or made accessible to us
or our Subcontractors pursuant to this Arrangement Letter that may be subject to heightened protections
under applicable privacy, cybersecurity, export control, and/or data protection laws, including, but not
limited to, protected health information pursuant to the Health Information Portability and Accountability
Act of 1996 ("HIPAA"), classified or controlled unclassified information subject to the National Industrial
Security Program, the National Industrial Security Program Operating Manual, or the Defense Federal
Acquisition Regulation Supplement ("DEARS"), data subject to Export Administration Regulations
("EAR"), or International Traffic in Arms Regulations ("ITAR") controlled data. Unless otherwise expressly
agreed upon and specified in writing by RSM and the City, you shall not provide us or any of our
Subcontractors with access to such data and you shall be responsible for the handling of all such data in
connection with the performance of the services requested hereunder, including, but not limited to, the
scrubbing, de-identification, de-aggregation, protection, encryption, transfer, movement, input, storage,
migration, deletion, copying, processing, and modification of such data.
RSM and the City acknowledge and agree that they may correspond or convey information and
documentation, including Confidential Information and Personal Information, via various forms of
electronic transmission, including, but not limited to, Third-Party Products, such as, email, FTP and cloud-
based sharing and hosting applications (e.g., portals, data analytics tools, and helpdesk and support
ticketing applications), and that neither party has control over the performance, operation, reliability,
availability, or security of these electronic transmissions methods. Therefore, neither party will be liable for
any loss, damage, expense, harm, disclosure or inconvenience resulting from the loss, delay,
interception, corruption, unauthorized disclosure, or alteration of any electronic transmission where the
party has used commercially reasonable efforts to protect such information. We offer our clients various
platforms for the exchange of information. You hereby agree that you shall be bound by and comply with
any and all user terms and conditions made available (whether by link, click-through, or otherwise)with
respect to such platforms.
Personal Information
As used herein, the term "Personal Information" means any personal information that directly or indirectly
identifies a natural person as may be defined by applicable privacy, data protection or cybersecurity laws,
and includes, but is not limited to, nonpublic, personally identifiable information such as Social Security
numbers, Social Insurance numbers, driver's license numbers or state-or province-issued identification
card numbers, credit or debit card numbers with or without any required security code, number or
passwords, health information, and other personal information as defined by applicable laws, whether of
the City or the City's customers or other third parties.
Each party agrees that it will not transmit to the other, in any manner, (i) Personal Information that is not
needed to render the services hereunder, and (ii) Personal Information that has not been encrypted. In
the event you transmit to us Personal Information in an unencrypted format or via unencrypted means,
you agree that we have no obligation to notify you of the foregoing.
You represent and warrant that you have provided all notices and obtained all consents required under
applicable data protection laws prior to your collection, use and disclosure to us or our Subcontractors of
such Personal Information and shall take reasonable steps to ensure that such Personal Information does
not include irrelevant or unnecessary information about individuals.
City of Riverside, Missouri
March 7, 2022
Page 11
In the event the services provided hereunder involve Personal Information collected in Canada, you
acknowledge that we or our Subcontractors performing services hereunder on our behalf may store,
transfer, and/or process such Personal Information in locations and on servers located outside of
Canada, including jurisdictions such as the United States whose data protection laws differ from those of
Canada. As a result, such Personal Information may be subject to access requests from governments,
courts, or law enforcement in those jurisdictions, including the United States, according to the laws in
those jurisdictions. Subject to applicable laws in such other jurisdictions, we will use reasonable efforts to
require that appropriate protections are in place to require our Subcontractors maintain protections on
Personal Information collected in Canada that are equivalent to those that apply in Canada.
Upon your written request, we will enter into a mutually agreed upon agreement relating to the lawful
cross-border transfer and processing of Personal Information.
We will use all such City-provided Personal Information, if at all, only for the purposes described in this
Arrangement Letter. The parties agree that as part of the performance of the services as described in this
Arrangement Letter, and as part of the direct business relationship between the parties, we may, at our
election, use the Personal Information to improve the services and for other similar internal and business
purposes. We agree to maintain appropriate security measures to protect such Personal Information in
accordance with applicable laws.
If we become aware of an unauthorized acquisition or use of City-provided Personal Information, we will
promptly inform you of such unauthorized acquisition or use as required by applicable laws and, upon
your written request, reasonably cooperate with you at your sole cost in support of any breach notification
requirements as imposed upon you by applicable laws.
Retention of Records
We will return to you all original records you provide to us in connection with this engagement. Further, in
addition to providing you with those deliverables set forth in this Arrangement Letter, we will provide to
you a copy of any records we prepare or accumulate in connection with such deliverables which are not
otherwise reflected in your books and records without which your books and records would be
incomplete. You have the sole responsibility for retaining and maintaining in your possession or custody
all of your financial and nonfinancial records related to this engagement. We will not host, and will not
accept responsibility to host, any of your records. We, however, may maintain a copy of any records of
yours necessary for us to comply with applicable law and/or professional standards. Any such records
retained by us will be subject to the confidentiality obligations set forth herein and destroyed in
accordance with our record retention policies.
Termination
Your failure to make full payment of any and all undisputed amounts invoiced in a timely manner
constitutes a material breach for which we may refuse to provide deliverables and/or, upon written notice,
suspend or terminate our services under this Arrangement Letter. We will not be liable to you for any
resulting loss, damage or expense connected with the suspension or termination of our services due to
your failure to make full payment of undisputed amounts invoiced in a timely manner.
In the event you terminate this engagement, you will pay us for all services rendered (including
deliverables and products delivered), expenses incurred, and noncancelable commitments made by us
on your behalf through the effective date of termination.
City of Riverside, Missouri
March 7, 2022
Page 12
We will not be responsible for any delay or failure in our performance resulting from acts beyond our
reasonable control or unforeseen or unexpected circumstances, such as, but not limited to, acts of God,
government or war, riots or strikes, disasters, fires, floods, epidemics, pandemics or outbreaks of
communicable disease, cyberattacks, and internet or other system or network outages. At your option,
you may terminate this Arrangement Letter where our services are delayed more than 120 days;
however, you are not excused from paying us for all amounts owed for services rendered and
deliverables provided prior to the termination of this Arrangement Letter.
When an engagement has been suspended at the request of management or those charged with
governance and work on that engagement has not recommenced within 120 days of the request to
suspend our work, we may, at our sole discretion, terminate this Arrangement Letter without further
obligation to you. Resumption of our work following termination may be subject to our client acceptance
procedures and, if resumed, will require additional procedures not contemplated in this Arrangement
Letter. Accordingly, the scope, timing and fee arrangement discussed in this Arrangement Letter will no
longer apply. In order for us to recommence work, the execution of a new Arrangement Letter will be
required.
We may terminate this Arrangement Letter upon written notice if we determine that our continued
performance would result in a violation of law, regulatory requirements, applicable professional or ethical
standards, or our client acceptance or retention standards.
The parties agree that those provisions of this Arrangement Letter which, by their context, are intended to
survive, including, but not limited to, payment, limitations on liability, claim resolution, use and ownership,
and confidentiality obligations, shall survive the termination of this Arrangement Letter.
Miscellaneous
We may mention your name and provide a general description of the engagement in our client lists and
marketing materials. We also may utilize Confidential Information you have provided to us in connection
with this engagement for purposes of creating benchmarking data to be used by our professionals and
other clients. This benchmarking data is aggregated with data from a minimum of five other entities so
that users of the data are unable to associate the data with any single entity in the database.
The City agrees that it will not associate us with any public or private securities offering without first
obtaining our consent. Therefore, the City agrees to contact us before it includes our reports, or otherwise
makes reference to us, in any public or private securities offering. Our association with an official
statement is a matter for which separate arrangements may be necessary. The City agrees to provide us
with printer's proofs or masters of such offering documents for our review and approval before printing,
and with a copy of the final reproduced material for our approval before it is distributed.
Our professional standards require that we perform certain additional procedures, on current and
previous years' engagements, whenever a partner or professional employee leaves the firm and is
subsequently employed by or associated with a client in a key position. Accordingly, you agree to
compensate us for any additional costs incurred as a result of your employment of one of our partners,
principals or employees.
City of Riverside, Missouri
March 7, 2022
Page 13
Notices
Unless otherwise expressly agreed upon by the parties in this Arrangement Letter, all notices required to
be given hereunder will be in writing and addressed to the party at the business address provided in this
Arrangement Letter, or such other address as such party may indicate by a notice delivered to the other
party. A copy of any legal notice (e.g., any claimed breach or termination of this Arrangement Letter) sent
by the City to RSM shall also be sent to the following address: Office of the General Counsel, RSM US
LLP, 200 South Wacker Drive, Suite 3900, Chicago, IL 60606. Except as otherwise expressly provided in
this Arrangement Letter, notices hereunder will be deemed given and effective: (i) if personally delivered,
upon delivery; (ii) if sent by registered or certified mail or by overnight courier service with tracking
capabilities, upon receipt; and, (iii) if sent by electronic mail (without indication of delivery failure), at such
time as the party that sent the notice receives confirmation of receipt, whether by read-receipt
confirmation or otherwise.
Governing Law
This Arrangement Letter, including, without limitation, its validity, interpretation, construction, and
enforceability, and any dispute, litigation, suit, action, claim, or other legal proceeding arising out of, from,
or relating in any way to this Arrangement Letter, any provisions herein, a report issued or the services
provided hereunder, will be governed and construed in accordance with the laws of the State of Illinois,
without regard to its conflict of law principles, and applicable U.S. federal law.
Entire Agreement
This Arrangement Letter constitutes the complete and exclusive statement of agreement between RSM
and the City, and supersedes all prior agreements, understandings, and proposals, whether oral or
written, relating to the subject matter of this Arrangement Letter.
If any term or provision of this Arrangement Letter is determined to be invalid or unenforceable, such term
or provision will be deemed stricken, and all other terms and provisions will remain in full force and effect.
This Arrangement Letter may be amended or modified only by a written instrument executed by both
parties.
Electronic Signatures and Counterparts
Each party hereto agrees that any electronic signature of a party to this Agreement Letter or any
electronic signature to a document contemplated hereby(including any representation letter) is intended
to authenticate such writing and shall be as valid, and have the same force and effect, as a manual
signature. Any such electronically signed document shall be deemed (a)to be"written"or"in writing," (b)
to have been signed and (c) to constitute a record established and maintained in the ordinary course of
business and an original written record when printed from electronic files. Each party hereto also agrees
that electronic delivery of a signature to any such document (via email or otherwise) shall be as effective
as manual delivery of a manual signature. For purposes hereof, "electronic signature" includes, but is not
limited to, (a) a scanned copy(as a "pdf' (portable document format) or other replicating image) of a
manual ink signature, (b) an electronic copy of a traditional signature affixed to a document, (c) a
signature incorporated into a document utilizing touchscreen capabilities or(d) a digital signature. This
Arrangement Letter may be executed in one or more counterparts, each of which shall be considered an
original instrument, but all of which shall be considered one and the same agreement. Paper copies or
"printouts," of such documents if introduced as evidence in any judicial, arbitral, mediation or
administrative proceeding, will be admissible as between the parties to the same extent and under the
same conditions as other original business records created and maintained in documentary form. Neither
party shall contest the admissibility of true and accurate copies of electronically signed documents on the
basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule.
City of Riverside, Missouri
March 7, 2022
Page 14
Please sign and return a copy of this Arrangement Letter to indicate your acknowledgment of, and
agreement with, the arrangements for our audit of the financial statements, including our respective
responsibilities.
Acknowledgement and Acceptance
Each party acknowledges that it has read and agrees to all of the terms and conditions contained herein.
Each party and its signatory below represents that said signatory is a duly authorized representative of
such party and has the requisite power and authority to bind such party to the undertakings and
obligations contained herein.
AGREED TO AND ACKNOWLEDGED BY:
RSM US LLP
\-\1-+
Kristen Hughes, Senior Director
Confirmed on behalf of the City of Riverside, Missouri:
-/5 -.24.2_2_--
Board of Aldermen ChaiVY 1 p1 o, Date
Brian ral, i nistrator Date
3-lG -- 2ezZ
Nate Blum, Finance Director Date
BK D 910 E.St.Louis Street.Suite 2001 P.O.Box 1190 I Springfield.MO 65801-1190
CPAs&Advisors 417.865.8701 1 Fax 417.865.0682!Wixom
Report on the Firm's System of Quality Control
To the Partners of RSM US LLP and the National Peer Review Committee
We have reviewed the system of quality control for the accounting and auditing practice of RSM US LLP(the
firm)applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended
April 30,2019. Our peer review was conducted in accordance with the Standards for Performing and Reporting
on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public
Accountants(Standards).
A summary of the nature,objectives,scope,limitations of and the procedures performed in a System Review as
described in the Standards may be found a www.aicpaora/msumrnarv. The summary also includes an
explanation of how engagements identified as not performed or reported in conformity with applicable
professional standards,if any,are evaluated by a peer reviewer to determine a peer review rating.
Firm's Responsibility
The firm is responsible for designing a system of quality control and complying with it to provide the firm with
reasonable assurance of perfonning and reporting in conformity with applicable professional standards in all
material respects. The firm is also responsible for evaluating actions to promptly remediate engagements
deemed as not performed or reported in conformity with professional standards,when appropriate,and for
remediating weaknesses in its system of quality control,if any.
Peer Reviewer's Responsibility
Our responsibility is to express an opinion on the design of the system of quality control and the firm's
compliance therewith based on our review.
Required Selections and Considerations
Engagements selected for review included engagements performed under Government Auditing Standards,
including compliance audits under the Single Audit Act;audits of employee benefit plans,audits performed
under FDICIA,audits of broker-dealers and examinations of service organizations[SOC 1 and SOC 2
engagements].
As a part of our peer review,we considered reviews by regulatory entities as communicated by the fim.if
applicable,in determining the nature and extent of our procedures.
Opinion
In our opinion the system of quality control for the accounting and auditing practice of RSM US LLP
applicable to engagements not subject to PCAOB permanent inspection in effect for the year ended April 30,
2019,has been suitably designed and complied with to provide the firm with reasonable assurance of
performing and reporting in conformity with applicable professional standards in all material respects. Finns
can receive a rating of pass,pass with defrciency(ies)or fail. RSM US LLP has received a peer review rating of
pass.
BKD,LLP
December 5,2019
Praxitx
*MOM •