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HomeMy WebLinkAbout12 109 Auditors Appointment (BDO) Dunwoody LLP) By-law THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE KJ • =° ab. nun or BYLAW NO. 2012 - 109 BEING A BY -LAW TO APPOINT AN AUDITOR FOR THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE WHEREAS pursuant to the said Municipal Act, Section 8 (1) and 9 provide that the powers of a municipality under this or any other Act shall be interpreted broadly so as to confer broad authority on the municipality to enable the municipality to govern its affairs as it considers appropriate and to enhance the municipality's ability to respond to municipal issues and a municipality has the • capacity, rights, powers and privileges of a natural person for the purpose of exercising its authority under this or any other Act; AND WHEREAS the Municipal Act, 2001, S.O. 2001, c. 25, Section 296 requires a municipality to appoint an auditor licensed under the Public Accountancy Act, 2004; NOW THEREFORE the Council of The Corporation of the Municipality of Kincardine ENACTS as follows: 1. That the firm of BDO Dunwoody LLP, Chartered Accountants and Advisors be appointed as auditor for the years ending December 31, 2012 to December 31, 2013 for The Corporation of the Municipality of Kincardine, to audit all records of the Corporation of the Municipality of Kincardine, including the records of Bruce Telecom, the Board of Management of the Business Improvement Area (BIA), the Police Services Board for The Municipality of Kincardine, as well as all trust funds administered by The Municipality of Kincardine. • 2. The term of this appointment shall be for years ending December 31, 2012 and December 31, 2013 as outlined in the Proposal for Audit Services, which is attached to this by -law as Schedule "A" 3. That this service be procured under 9.0 Negotiated Purchases of G.G. 2.17 Purchasing and Procurement Policy (Section 9.3 where the extension of an existing contract would prove more cost effective or beneficial). 4. That the Mayor and CAO be authorized to execute, on behalf of the Municipality of Kincardine, the Terms of Engagement with BDO Dunwoody LLP, which is attached to this by -law as Schedule "B ". 5. This By -law shall come into full force and effect upon its final passage. 6. This By -law may be cited as the "Auditors Appointment (BDO Dunwoody LLP) By- Law ". READ a FIRST and SECOND time this 19 day of September, 2012. • 1ayor icy e y READ a THIRD time and FINALLY PASSED this 19 day of September, Q1 ?. �.. .... A,..alk l r.. ay.r 1r . i C erk 1 Proposal for Audit Services MUNICIPALITY OF KINCARDINE TNT MUNICIPALITY or IQNCATCOINE great energy. balanced life. Submitted by: Mike Bolton, MAcc, CA Partner Steven D. Watson, HBA, CA, CFP On behalf of Steven D Watson Professional Corporation, Corporate partner of BDO Canada LLP BDO Canada LLP Chartered Accountants & Advisors, Licensed Public Accountants 970 Queen Street Kincardine, ON N2Z 2Y2 Phone (519) 396 -3425 Fax (519) 396-9829 Email mbolton @bdo.ca Dated: August 22, 2012 2 ara Prig e appreciate the opportunity to submit our proposal to continue to provide W professional services to the Corporation of the Municipality of Kincardine (the "Municipality"). The attached proposal outlines why we believe that BDO Canada ISP (hereafter referred to as "BDO ") is the right auditor for your organization. Auditing is the core of our work and we understand that the annual audit is more than just a legal requirement. An audit does more than provide an opinion on the Municipality's financial position at a particular point in time. It also assists you in making important decisions that affect the future growth and stability of our community. For that reason, we have developed a focused and comprehensive audit service. Our management letters provide valuable information, including the implications of our opinion, issues arising from the audit and recommended solutions t0 the Municipality's Council. Our proposal is based upon the following key features: The Kincardine office of BDO is a long time auditor of the Municipality. We have audited the Municipality since the mid 1960's. Because we are a local firm we understand the issues facing the Municipality as well as the local economy. The Port Elgin office of BDO is long time auditor of Bruce Telecom. Because we have audited the system for a number of years we understand the issues facing the Bruce Telecom for the new services they are offering and the filing requirements with regulatory bodies. BDO in Kincardine is a full service public accounting firm capable of offering the broadest range of accounting, auditing, taxation and consulting services to the Corporation of the Municipality of Kincardine using resources and people located in Southwestern Ontario. BDO is the auditor of over 15 municipalities in Southwestern Ontario, which equips us to provide you with a high level of knowledge, expertise and experience in the municipal sector. BDO nationally has established a Significant Interest Group that specifically addresses the special needs of municipalities, giving us the ability to facilitate an exchange of information and ideas, team about developments faster, gain a broader perspective, make better decisions, suggest proven solutions and provide the Municipality a high quality service. Traci Smith from our Owen Sound office is a recognized local municipal audit Leader who has consulted to the treasurers of Bruce and Grey counties. Traci and Mike Bolton work together on issues that are common to all municipal clients in the local area. BDO is committed to developing a lasting and trusted relationship with the Municipality by maintaining the continuity of audit staff. BDO audit methodology leads to an efficient and effective audit through planning and the use of templates that are specifically designed for the audit of municipalities. BDO's goal is to minimize disruption to you and your staff without sacrificing an efficient and effective audit. BDO fees are competitive. 3 Our fees, like those of other professional accounting firms are based on actual time spent on behalf of the organization and are measured by standard hourly rates. Based upon our experience with municipalities and particularly your municipality, our proposed fees for the audit engagement for the year ended December 31, 2012 and 2013 will be $61,300 per year plus applicable taxes. This fee level is the same as 2011 and reflects that we value the Municipality as a client. This fee includes: • The audit of the financial statements of the Municipality of Kincardine Our proposed fee relates to audit services identified above. Because this is a year of transition at the Municipality we recognize that there will be some additional services that you may require. Accordingly, any additional time spent by BDO staff for training of your staff, assisting with preparation of working papers or journal entries or for delays caused by information not being ready at the beginning of the audit will be billed at our regular billing rates. The Municipality of Kincardine is unique in a number of ways that increases the time required for us to complete the audit in comparison to other local municipalities. • The number of general ledger accounts and reserve accounts maintain is much higher. • There are been a number of adjustments to prior year financial statements resulting from incorrect information about tangible capital assets. • The level of detail for tangible capital assets is much higher. • BDO drafts the financial statements for Kincardine which is normally a function performed by the Municipality so that our service is limited to auditing the statements. We acknowledge that the records of the Municipality and the information provided during the audit were of higher quality than we have received in other years and we hope that the quality of information provided continues to improve every year. After working with you for a year we will have a better idea of the amount of audit time we will require and can submit a complete five year proposal for audit services. BDO Fwww.lbdo ca5659 PO 625 Box 11390 LLP Port Elgin ON NOH 2C0 Canada September 13, 2012 Members of Council The Corporation of the Municipality of Kincardine 1475 5th Concession RR 5 Kincardine, ON N22 2X6 Dear Members of Council : This letter will confirm our understanding of the terms of our engagement as auditors of The Corporation of the Municipality of Kincardine for the year ending December 31, 2012. Our Role as Auditors Conduct of the Audit At the conclusion of our audit, we will submit a report directed to the Members of Council, inhabitants and ratepayers containing our opinion on the consolidated financial statements. If it appears for any reason that we will not be in a position to render an unqualified opinion on the consolidated financial statements, we will discuss this with you. We will conduct our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan to perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, An audit involves performing procedures to obtain audit evidence supporting the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall consolidated financial statement presentation. Because of the inherent limitations of an audit, together with the inherent limitations of internal control, there is an unavoidable risk that some material misstatements may not be detected, even though the audit is properly planned and performed in accordance with Canadian generally accepted auditing standards. 1 BOO Canada LLD, a Canadian limited liability partnership, is a member of BOO International Limited, a UK company limited by guarantee, and forms part of the international BD0 network of independent member firm. In making our risk assessments, we consider internal control relevant to the entity's preparation of the consolidated 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 entitys internal control. However, we will communicate to you in writing concerning any significant deficiencies in internal control relevant to the audit of the consolidated financial statements that we have identified during the audit. During the course of our audit, if we identify the following matters, we will communicate them to the appropriate level of management and the members of Council : • misstatements, other than trivial errors; • fraud; • misstatements that may cause future consolidated financial statements to be materially misstated; • illegal or possibly illegal acts, other than ones considered inconsequential; • significant weaknesses in internal control; and • certain related party transactions. We will also make notes of any other matters that we believe should be brought to your attention and will communicate them to you. These might include comments on internal control procedures, management information systems, accounting policies and other client service matters. Audits do not usually identify all matters that may be of interest to management in discharging its responsibilities. The type and significance of the matter to be communicated will determine the level of management to which the communication is directed. Throughout the audit we will also be communicating with the members of Council on matters that bear on independence, matters that pertain to planning and executing our audit and any other matters in addition to those identified in the preceding paragraphs that we feel should be brought to their attention as required by Canadian generally accepted auditing standards. Since this audit is a group audit where we may be relying on component auditors, please note the following: • there will be unrestricted communication between the group engagement team and the component auditors to the extent allowable under law or regulation; • there will be important communications between the component auditors, those charged with governance of the component and component management, including communication of significant deficiencies in internal controls; • the engagement may include important communications between regulatory authorities and 2 4 , , FIRM PROFILE he Kincardine and Port Elgin offices of BDO Canada LLP (hereafter referred to as 'BD0 ") T has been serving municipalities in Southwestern Ontario for over half a century. We strive to provide the finest accounting, auditing, taxation and management advisory services available. We also deliver our services with the highest degree of integrity and objectivity. The Kincardine and Port Elgin offices will be the lead offices for the audit of the Municipality of Kincardine. Steve Watson in our Kincardine office understands the local economy and provides a local view that can be useful in audit of the Municipality. Mike Bolton in our Port Elgin office has many years of experience in auditing municipalities and he is currently the regional auditing and accounting practice leader for the Southern MidWestem Ontario. He is consulted daily on difficult auditing and accounting issues from across the region. He brings that experience to the audit of the municipality. The Best of Big and Small The size and strength of our office allows us to be a "full service" public accounting firm capable of offering you the broadest range of accounting, auditing, taxation and consulting services using resources and our people all located in Bruce and Grey counties. The "bigness" of our firm gives you access to the complete range of services that you, as a municipality require. At the same time, we retain the flexibility and individual attention clients appreciate from a "small" local firm. The personal attention of our partners and staff helps to foster the relationships and trust that you need to implement and benefit from our services. At BDO we offer you the best of both "big" and "small" firms. In order to best serve our clients, we draw on staff and partners in our local region. By accessing expertise from our Kincardine, Port Elgin, Owen Sound, Walkerton, Wingham and Hanover offices we are able to offer our clients the service of a large firm. Our local offices consist of 37 Chartered Accountants, 13 of whom are Partners and professional staff of 60. Our partner experience, staffing, or in -house specialty services is unmatched in the area. BDO has been an integral part of the business community from the days when its predecessor partners started providing services to the business community in Kincardine. The partner and staff of the Kincardine office are actively involved in making this a better Municipality to live in. As well as being ratepayers in the Municipality, they are involved as members of the boards of a number of sports and charitable organizations, they serve as coaches for minor sports organizations, provide volunteer services and participate in many of the activities that make this Municipality a great place to live. In addition, we as a firm support many organizations as sponsors for fundraising events and sponsors of minor sports teams and cultural events. 5 BDO's Southern MidWestern Ontario Region BDO's Southern Mid Western Ontario offices, which are located from Windsor to Orangeville to Collingwood to Wiarton to Kincardine have always maintained a close working relationship. This relationship was formalized in 2000 when we adopted a regional organizational structure. The result of this restructuring was the formation of BDO's Southern MidWestern Ontario region (hereafter referred to as the "SMO "). The major purpose of this restructuring was to better facilitate the delivery of services to our clients and further foster the development of industry and other specialties, including our municipal specialty. You will benefit from our new structure because you will always have access to experienced staff and leading specialists as the audit and other needs of Kincardine change. Currently, our SMO offices are the auditors of over 25 municipalities in Southern MidWestern Ontario, which equips us to provide you with a high level of knowledge, expertise and experience in the municipal sector. When you choose us, you gain access to our full compliment of services and experienced professionals. BDO's National Municipal Scope Nationally, BDO is a dominant firm serving over 300 municipal clients, the vast majority of which are similar to the Corporation of the Municipality of Kincardine. They must deal with the challenges of "doing more with less ", the downloading of services, the increased pressure for more services, aging populations, shrinking tax bases and being "competitive" in a global economy. For these reasons BDO has developed an internal Municipal Services Significant Interest Group (hereinafter referred to as "SIG "). The purpose of this group is to encourage collaboration among the Firm's municipal auditors and specialists. By facilitating an exchange of information and ideas, our BDO auditors can learn faster, gain a broader perspective, make better decisions, suggest proven solutions and provide the Municipality a high quality service. This SIG is made up of representatives from across Canada. Your Engagement Partner, Mike Bolton, is our local representative. This group meets periodically by teleconference and annually with a face -to -face meeting in the fait. Between meetings, the group communicates using BDO's computer intranet. Messages are posted to a bulletin board for reference and discussion. When specific questions or issue arises, members can circulate the matter for discussion. We have found this to be extremely effective when researching and resolving unique issues our municipal clients are facing. In the accounting and consulting professions, BDO is widely recognized with representation on key technical committees of both the Ontario Institute of Chartered Accountants and the Canadian Institute of Chartered Accountants. Our Firm has committed to being on the cutting edge of municipal auditing and taken action by connecting our best people with each other and with key industry committees. We have a strong voice in our profession and are using it for the benefit of our clients and country. 6 1 , Summary 2012/13 Municipality of Kincardine Audit procedures $48,650 • Financial statement preparation 10,000 • BIA 575 • Trust funds 575 • Gas tax audit 1,500 Total billing $61,300 In recognition of the value we place on our ongoing relationship with the Municipality of Kincardine we have frozen our fee at the same levet as 2011. This fee includes out of pocket expenses and any travel time or expenses. We are proud to have been the auditors for the Municipality of Kincardine and Bruce Telecom for the past 50 plus years and wish to carry on as auditors. We hope that you agree with us that we have provided excellent service to the Municipality over this time period. We have tried to carry out our duties in a professional, cost effective manner through this time of change in senior staff at the Municipality and changes in the reporting requirements, as mandated by the Province of Ontario. We have added value to the annual audit process through suggestions for improvements in internal controls and accounting processes, in our management letters. We have informed the Municipality's accounting staff of GST input Tax Credits which had been missed, that we found through our audit procedures. BDO is located in the Municipality of Kincardine. Although we are located nearby, we bring the resources of a National firm to the table. If necessary we can call on the experience of over 360 partners in 103 offices. In particular we work closely with Traci Smith in our Owen Sound office to deal with problems that are unique to all our municipalities in Bruce and Grey. If we come across an issue that we have not seen before it is more than likely that someone within our firm has addressed the issue already. This reduces the time and cost of finding an answer for the Municipality. We want to continue as the auditors of the Municipality and have quoted what we think is a fair and reasonable fee based on the work necessary to issue our audit reports. components related to financial reporting matters; and • to the extent it determines necessary, the group engagement team is permitted access to the component information, those charged with govemance of the component, and the component auditors (including relevant audit documentation) as well as to perform work or request a component auditor to perform work on the financial information of the component. We plan to place reliance on the work of an expert who is an external consultant. We will communicate with them either verbally or through a separate engagement letter the nature of our reliance as well as the requirements and responsibilities of both parties. Role of Management and Council Our audit will be conducted on the basis that management and those charged with governance acknowledge and understand that they have responsibility: (a) For the preparation of the consolidated financial statements in accordance with Public sector accounting standards; (b) For such internal controls as management considers necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error; and (c) To provide us with: • access to all information of which management is aware that is relevant to the preparation of the consolidated financial statements such as records, documentation and other matters; • additional information that we may request from management for the purpose of the audit; and • unrestricted access to persons within the entity from whom we determine it necessary to obtain audit evidence. As part of our audit process, we will request from management and, where appropriate, those charged with govemance written confirmation concerning representations made to us in connection with the audit. Fraud and Error Management is also responsible for the following with respect to fraud and error: • the design and implementation of internal controls to prevent and detect fraud and error; • an assessment of the risk that the consolidated financial statements may be materially 3 misstated as a result of fraud; • providing us with information relating to fraud or suspected fraud affecting the entity involving management, employees who have significant roles in internal control, or others, where the fraud could have a material effect on the consolidated financial statements; • providing us with information relating to any allegations of fraud or suspected fraud affecting the entity's consolidated financial statements communicated by employees, former employees, analysts, regulators or others; and • communicating their belief that the effects of any uncorrected financial statement misstatements aggregated during the audit are immaterial, both individually and in the aggregate, to the consolidated financial statements taken as a whole. It is the responsibility of the Members of Council, inhabitants and ratepayers to ensure that policies are in place for effective corporate govemance, and to ensure that all unusual and material transactions during the year are properly approved. We look forward to full cooperation from your staff during our audit. Reporting Our audit will be conducted on the basis that the consolidated financial statements have been prepared In accordance with Public sector accounting standards. Unless unanticipated difficulties are encountered, our report will be substantially in the form outlined in Appendix 1. Should there be unforeseen circumstances, the report may differ from that attached. Financial Statement Preparation Services As agreed, we will provide assistance in the preparation of the consolidated financial statements, possibly including adjusting journal. entries. These services may create a threat to our independence. We, therefore, require that the following safeguards be put into place: • that you create the source data for all the accounting entries; • that you develop any underlying assumptions required with respect to the accounting treatment and measurement of the entries; and • that you review and approve all journal entries prepared by us; in addition to the draft 4 consolidated financial statements. As an additional safeguard, our file review policies require that someone other than the preparer review the proposed journal entries and consolidated financial statements. Additional Services • Forwarding a copy of the management letter to Ministry of Municipal Affairs and Housing on your behalf. Management advwwledges and approves the release of the management letter to Ministry of Municipal Affairs and Housing. As agreed, we will also assist in preparing the following spedal reports: • Gas Tax Audit Report Management will provide the information necessary to complete these reports and will file them with the appropriate authorities on a timely basis. Tax Services If other tax services, such as tax planning, GST /HST advice, etc. are required, we will confirm them with you as they arise. To the extent that such additional services are not covered by a separate engagement letter, the terms of this engagement letter shall apply to those additional services which you request. Our audit is conducted primarily to enable us to express an opinion on the consolidated finandal statements. Accordingly, the audit process may not detect situations where the municipality is incorrectly collecting GST /HST or incorrectly claiming input tax credits, unless material. As you are aware, failure to properly account for the GST /HST could result in you or your municipality becoming liable for tax, interest or penalties. These situations may also arise for provincial sales tax, custom duties, and excise taxes. If you have any questions about the terms of this engagement, please do not hesitate to contact us. Please sign and return the attached copy of this letter to indicate your admowledgement of, and agreement with, the arrangements for our audit of the consolidated financial statements including our respective responsibilities. 5 Standard Terms and Conditions A copy of our Standard Terms and Conditions is enclosed in Appendix 2. You should ensure that you read and understand these as they contain important terms including those in connection with the scope of the Engagement, your responsibilities, fees, use of our advice and our liability. The Standard Terms and Conditions form part of the Engagement Letter. Should any of the terms included in the Standard Terms and Conditions conflict with any of the other terms in this letter, the latter will prevail. You expressly agree and understand that the terms in the Engagement Letter apply to all services provided by us pursuant to the Engagement, whether such services were performed or provided before or after the signing of the Engagement Letter, The Engagement Letter will remain in place and fully effective until varied or replaced by written agreement between us. It is a pleasure for is to be of service and we look forward to many years of association with you. Yours truly, ( O& LAP Chartered Accountants, Licensed Public Accountants Kincardine, ON September 13, 2012 Agreement of all the above terms, after full review, consideration and discussion of them, is hereby acknowledged by The Corporation of the Municipality of Kincardine Signature Position t� Date 7n 34"C C-A0 Signature Position D -. Appendix 1 Form of Report INDEPENDENT AUDITORS REPORT To the Members of Council, inhabitants and ratepayers of The Corporation of the Municipality of Kincardine We have audited the accompanying consolidated financial statements of The Corporation of the Municipality of Kincardine, which comprise the balance sheet as at December 31, 2012, and the consolidated income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles, and for such intemal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of The Corporation of the Municipality of Kincardine as at December 31, 2012 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. 7 Appendix 2 Standard Terms and Conditions introduction Conflict of Interests Unless othery ise specifically agreed in the Engagement We provide a wide range of services for a large number of Letter, the Engagement Letter replaces any previous clients and may be in a position where we are providing agreements between us in relation to or In contemplation services to clients in the same industry as you who may of the Engagement and shall apply to any future represent competing commercial interests to you or whose engagements we carry out on your behalf unless varied or interests may otherwise conflict with your own. We replaced. The Engagement Letter (which includes these cannot be certain that we will identify all such situations Standard Terms and Conditions) constitutes the entire that exist or may develop, and it is difficult for us to agreement between us. In entering into this Engagement anticipate all situations that you might perceive to Letter you admowledge that you have not relied on, and conflict. We therefore request that you notify us promptly shall have no right or remedy In respect of, any statement, of any potential conflict affecting the engagement representation, assurance or warranty (whether made contract of which you are, or become, aware. negligently or innocently) other than as expressly set out In the Engagement Letter. Where the above circumstances are identified by us or you and we believe that your interests can be property independence safeguarded by appropriate procedures, we will discuss and agree with you the arrangements that already may exist or Professional and certain regulatory standards require us to that we will put in place to preserve confidentiality and to be independent, In both fact and appearance, with respect ensure that the advice and opinions which you receive to The Corporation of the Municipality of Kincardine in the from us are wholly Independent of the advice and opinions performance of our services. We will communicate in that we provide to other clients. writing to the members of Counclt any relationships between BDO Canada LLP (including its related entities) Confidentiality and The Corporation of the Municipality of Kincardine (including its related entities) that, in our professional We will maintain the strictest confidence with respect to judgment, may reasonably be thought to bear on our any client's or former clients information. Accordingly, independence. Further, we will confirm our independence your confidential information will not, without your in writing. consent, be disclosed to any Individuals in our Firm beyond those who are in the region through which you engaged our services and those individuals from other offices who are involved in performing services for you. Nor will it be disclosed without your consent to anyone outside the Firm, with the exception that we proceed an the basis that we have your consent to disclose information required by judicial, regulatory or professional authority. 9 Practice Inspections Dispute Resolution Procedures As required by legal, regulatory or professional authorities If any dispute, controversy or claim arises in connection (both in Canada and abroad) or by Firm policy, our client with the performance or breach of this agreement, either files must periodically be reviewed by practice inspectors party may, upon written notice to the other party, request to ensure that we are adhering to professional and Firm facilitated negotiations. Such negotiations shall be assisted standards. We will proceed on the basis that we have your by a neutral facilitator acceptable to both parties and shall consent to provide our files relating to your engagement to require the best efforts of the parties to discuss with each these practice Inspectors for the sole purpose of their other in good faith their respective positions and, inspection. respecting their different interests, to finally resolve such dispute. Other Matters Limitation of Liability Personal Information In any dispute, action, claim, demand for losses or It is acknowledged that we will have access to all personal damages arising out of the services performed by BOO Information In your custody that we require to complete Canada LLP pursuant to this engagement, BDO Canada LLP our engagement. Our services are provided on the shall only be liable for its proportionate share of the total understanding that: liability based on degree of fault as determined by a court of competent jurisdiction or by an independent arbitrator • you have obtained any required consents for as a result of the dispute resolution procedures discussed collection, use and disclosure to us of personal previously, notwithstanding the provisions of any statute or information required under applicable privacy rule of common law which create, or purport to create, legislation; and joint and several liability. • we vdll hold all personal information in Our liability shall be restricted to damages with our Privacy Statement. ages of a direct and compensatory nature and shall not include indirect, Electronic Gommrurkpebna consequential, aggravated or punitive damages, or damages for loss of profits or expected tax savings. During the course of our audit, we may be required to communkate to you electronically by email or through the Sole Recourse and Other 800 Member Firms Internet. In some instances, electronic copies of your This engagement is between you and BDO Canada LLP only. consolidated financial statements may be sent to you electronically or may be required by a regulatory body. As The provisions of this clause shall only apply where, and to the you are aware, there is security risk attached to these extent, permitted by applicable laws. electronic communications (including human error). If one of our affiliates carries out any work for you In Please communicate with us regarding any issues or �� concerns you may have in this regard. relation to the services to which this engagement ies our affiliates will do so as a sub - contractor of BDO Canada LLP. BDO Canada LLP shall remain the contracting party and shall be the sole entity that is responsible to you, including for the work carried out by any of our affiliates. Also, where appropriate, we may use other BDO Member Finns to assist us with the services to which this engagement applies. Notwithstanding the fact that the services may be carried out by other BDO Member Firms assisting us as supplemental providers of services and as 10 sub - contractors of BDO Canada LIP (BDO sub- work product made available to you by our Firm; contractors), you agree that BDO Canada LLP shall have and sole liability for both its acts and /or omissions and also all the acts and /or omissions of any ODD sub - contractors and you services performed by BDO Canada LLP agree that you shall bring no claims or proceedings of any pursuant to this engagement, , dad unless, and to the nature whatsoever (whether in contract, tort, breach of extent that, such lasses, costs, damages and statutory duty or otherwise) against any Boo sub- expanses are found by a court of competent contractors or BDO International entities (including, of 6 ktion to have been due to the negligence without limitation, BDO International Limited and Brussels of BDO Canada LLP. In the event that the matter Worldwide Services BVBA) or other BDO Member Finns in is settled out of court, we will mutually agree on any way arising from, in respect of or in connection with the extent the indemnification to be provided the services or this engagement. by Your municipality, fading which, the matter may be referred to dispute resolution in These exclusions shall not apply to any liability, claim or accordance with the terms of this letter. proceeding founded on an allegation of fraud or wilful Propriety of Working Papers misconduct or other liability that cannot be excluded under applicable laws. The working papers prepared in conjunction with our audit are the property of our Firm, constitute confidential It is agreed that, unless othervrhe specified, the limitation information and will be retained by us in accordance with of liability and indemnification provisions in this our Firm's policies and procedures. engagement shall apply equally to BDO Canada LLP, our affiliates and any BDO sub contractors we may involve in Use and Distribution of Our Report the Services. The examination of the consolidated financial statements You agree that any of cur affiliates and any BDO sub- and the issuance of our audit opinion are solely for the use contractors whom we may involve in the services or Boo of The Corporation of the Municipality of Kincardine and International entities or other BDO Member Firms shall those to whom our report is specifically addressed by us. each have the right to rely on and enforce the paragraphs above as if they were parties to this engagement BDO Canada LLP makes no representations of any kind to any third party in respect of these consolidated financial f sdernnrtY statements and we accept no responsibility esponsibility for their use by Your municipality hereby agrees to indemnify, defend (by any third party. counsel retained and instructed by us) and hold harmless If reproduction or publication of our report is planned in an BDO Canada LLP and its partners, agents or employ, from and against any and all losses, costs (including annual report or other report on including electronic solicitors' fees), damages, expenses, claims, demands or bongs or posting of the report on a web site, a copy of the entire document should be submitted to us in sufficient liabilities arising out of or in consequence of: time for our review before the publication or posting • the breach your munici li or its directors, process begins. by You W tY. officers, agents or employees, of any of the Should the municipality wish to include the consolidated covenants made by your municipality herein, financial statements referred to above and our report including, without restricting the generality of thereon in a document proposed to be used in connection the foregoing, the misuse of or the unauthorized with a public or private offering of securities at some dissemination of, our audit report or the future date, please contact us immediately. We will consolidated financial statements in reference to consider our consent to the inclusion of our report M such which the audit report is issued, or any other 11 a document at that time. Severabilite Fen In the event that any part of these Terms of Business and the Engagement Letter of which they form part is held to Our professional fees will be based on our regular billing be invalid or unenforceable, the remainder will continue in rates which depend on the means by which and by whom full force and effect. our services are provided, plus direct, out -of- pocket, expenses, applicable Goods and Services Tax, Provincial Governing: Laws and Termination Sales Tax and Harmonized Sales Tax, and are due when rendered. Fees for additional services will be established The above terms of our engagement shall remain operative separately. until amended, terminated or superseded in writing. They shall be interpreted according to the laws of the Province Interest will be charged on all overdue accounts at the of Ontario and the Laws of Canada applicable therein, and rate of 1% per month (12% per annum). any disputes arising from this engagement shall be referred to the courts of Ontario, which shall have exclusive International BOO Network jurisdiction. The Firm is a member of the 8D0 international network. It is possible that we may determine that we cannot render This network comprises independent firms (which use a report or complete the engagement. If, In our "BDO" as part of their business name) in many countries. professional judgment, the circumstances require, we will These firms are associated BDO entities, but are separate notify you of our resignation from this engagement which legal entities. shall conform to all applicable laws. No associated BDO entity is our agent or partner, and no associated BDO entity has authority to enter into any legal obligations on our behalf. 11 we introduce you to an associated BDO entity we do not accept any liability for work that they carry out on your behalf and you must make your own contractual arrangements with them directly. We are not the agent or partner of any associated 800 entity and we do not have authority to enter into any legal obligations on their behalf. Force Maieure We will not be liable for any delays or failures in performance or breach of contract due to events or circumstances beyond our reasonable control, including acts of God, war, acts by governments and regulators, acts of terrorism, accident, fire, flood or storm or civil disturbance. 12