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HomeMy WebLinkAboutCommissioners - RKL, LLPOctober 2, 2024 Dean A. Horst, Chairman Franklin County Commissioners 272 North 2nd Street Chambersburg, PA 17201 Re: Forensic Accounting Dear Mr. Horst: This letter constitutes an agreement between the Board of Franklin County Commissioners (“FCC”, “Board”) and RKL, LLP (“RKL”), under which we will provide forensic services as it relates to certain financial records and transactions (“Services”). The following paragraphs outline the proposed scope of services, arrangements for staffing, standard hourly rates, and standard terms and conditions. SCOPE OF SERVICES The Services will be conducted under the AICPA’s Statement on Standards for Consulting Services (SSCS) and Statement on Standards for Forensic Services No. 1 (SSFS 1). Such services do not constitute an audit, review, or any other attestation service as those services are defined in AICPA literature applicable to such engagements. Accordingly, these services will not result in the issuance of a written communication to third parties by RKL regarding financial data or internal controls, expressing an opinion or conclusion or obtaining or providing any form of assurance. The consulting services RKL expects to provide under this engagement are as follows: 1)We will review the summary report of dog-related expenses billed to the Veterans Department. We will meet with management to understand how they identified transactions and perform an independent assessment. 2)We will review the other Veterans Department outreach programs from January 2022 through August 2024. After interviewing key personnel, we will submit a plan to the Board to test certain transactions/general ledger accounts. 3)We will review the HR Department’s summary report of time abuse by the Head and Assistant of the Veterans Department. We will also meet with management to understand how they identified instances of time abuse and perform an independent assessment. 4)We will review cash receipts and disbursements from January 2022 through August 204. We will trace each transaction over $50 to underlying support to understand the nature of the transactions, 5)We will meet with the Controller and review the summary report of his investigation. We will gain an understanding of internal controls of cash management. 6) We will review disability benefits from 2022 through August 2024 to understand why the Head of the Veterans Department diverted from the department email address to non- county email address and the financial impact of his actions. At the completion of our Services, we will provide the Board with a forensic report that describes the procedures performed, our findings, and recommendations. STAFFING AND FEES RKL shall be compensated for our Services at our standard hourly rates for the professionals performing the work. We expect our fee not to exceed $40,000, but will be based upon actual time incurred. We will notify you as we approach this amount. The services provided by RKL will be conducted by one or more appropriately qualified employees of RKL with appropriate training, certifications and experience. Our standard hourly rates, which are as follows: Partner $500-$650 Sr. Manager $325 Consultant $185-$250 Additionally to cover the administrative costs associated with this engagement, such as technology tools utilized in the performance of the engagement, storage, transmission, and security of documentation and processing of any work product, and any specialized research databases, communications, scanning/photocopying, postage and other clerical assistance, we will charge a 4% administrative fee. We expect there may be scope limitations which may influence our findings. We will communicate any scope limitations to you as they become available. All invoices are issued payable upon receipt. We reserve the right to defer rendering further service until payment is received on past due invoices. Direct Expenses and Billing The professional fees for the Services referenced above do not include direct expenses. Direct expenses will be kept to a maximum of $1,000 and be billed separately. Any single direct expense above $250 will be discussed with the Board before we incur them and are subject to the Board’s prior written approval. Examples of direct expenses include mileage, airfare, hotels, and special database access. We do not anticipate any direct expenses unless we are required to go onsite. Fees and expenses will be billed monthly as our work progresses and are due upon submission. A service charge of 1.25% per month (15% per annum) will be charged on all fees invoiced in accordance with this Agreement and not paid within thirty (30) days from the date of receipt of the invoice. All outstanding fees invoiced in accordance with this Agreement must be paid prior to the release of our final report. RKL reserves the right to withdraw from or stop work on the Services if fees have not been paid consistent with this Agreement. If the engagement is terminated by the Board prior to completion, RKL will bill for services rendered to the date of termination which will be due upon receipt of the invoice. Payment of our professional fees and expenses is not contingent upon the completion of a transaction or on the outcome of any action. STANDARD TERMS AND CONDITIONS Our workpapers and any resulting reports are to be used only in connection with this particular engagement. Our workpapers and written report may not be published or used with any other manner without the written consent of RKL. Limitation of Action No action, whether based on contract, product liability, or tort, including any action based on negligence, or any other legal theory arising out of the performance of this engagement, may be brought by either party more than two (2) years after the party knew or should have known of the breach or damage (whichever is first), except that an action for non-payment may be brought within two (2) years of the date of the last payment. Other Relevant Information From time to time and depending upon the circumstances, we may use third-party service providers to assist us in providing professional services to you. In such circumstances, it may be necessary for us to disclose confidential client information to them. We enter into confidentiality agreements with all third party service providers and we are satisfied that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. Termination If you or RKL fails to perform its obligations under this agreement, the other party shall have the right to terminate this agreement. In such an event, RKL shall have the right to suspend performance of services hereunder without any further liability to you whatsoever. In the event of termination by either party, a final invoice will be prepared to reflect all billable services and expenses incurred by RKL through the termination date and presented to you for payment in accordance with the fee terms set forth above. Summary This agreement will become effective as soon as you sign and date the original copy of this letter and return the signed copy to us. If the need for additional services arises, our agreement with you will need to be revised. It is customary for us to describe these revisions in an addendum to this letter. Sincerely, Brad Steinweg, CPA, CVA, CFE Senior Manager, Consulting Service Group ACCEPTED BY DEAN A. HORST ON BEHALF OF FRANKLIN COUNTY COMMISSIONERS: Signature Date