Contract - Conrad & Associates - 2004-06-21 CONRAD AND CERTIFIED PUBLIC ACCOUNTANTS
ASSOCIATES, L.L.P. 2301 RUPNOEN CALIFORNIA I E 200
(949)474-2020
June 21, 2004 Fax(949)263-5520
Rob Hamers
Costa Mesa Sanitary District
P.O. Box 1200
77 Fair Drive
Costa Mesa, California 92628-1200
Dear Mr. Hamers:
The purpose of this letter is to set forth the nature, terms, and objectives of our engagement to audit the
financial statements of the Costa Mesa Sanitary District for the fiscal year ending June 30, 2004.
CONRAD AND ASSOCIATES, I..E.P. is one of the largest local firms in Southern California that specializes in
local government auditing. We currently serve as auditors for over 60 agencies throughout Southern
California.
We will conduct our audit in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.
We will perform an audit of the financial statements of the Costa Mesa Sanitary District for the year
ending June 30, 2004. We will perform our audit for a fee of$6,300 for the fiscal year ended June 30,
2004. The District will prepare management's discussion and analysis. Should the District choose to
draft and word process the financial statements (including the notes), we would agree to a $1,000 price
reduction.
Hourly rates in effect for any additional services requested by the District will be as follows:
Classification Hourly Rate
Partner $175
Manager 115
Senior Accountant 95
Staff Accountant 85
Our fee contemplates conditions satisfactory for the completion of the audit. We expect the District to
provide at the start of the year end audit a trial balance reflecting all year-end adjustments,
reconciliations, schedules supporting asset and liability balances, assistance in the pulling of documents
supporting balance sheet amounts, and the typing of confirmation requests. If assistance is needed in
preparing year end journal entries or resolving reconciliation issues, we would perform the same at the
hourly rates indicated in this cost proposal. We plan on performing our audit field work in December or
January.
The auditing standards require that we disclose to you the following: Auditors are responsible for
planning the audit in a manner to provide reasonable, but not absolute, assurance that the financial
statements are free of material misstatement. Management is responsible for maintaining the accounting
MEMBERS OF AICPA AND CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBER OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PRIVATE COMPANIES PRACTICE SECTION
Rob Hamers
Costa Mesa Sanitary District
June 21, 2004
Page2of2
records in accordance with generally accepted accounting principles and for adjusting the accounting
records to correct misstatements so that the effects of any uncorrected misstatements are immaterial,
both individually and in the aggregate to the financial statements taken as a whole. Also, because an
audit is performed on a limited test basis, it cannot be relied upon to disclose instances of
noncompliance, fraud, error, or irregularity. However, we will report to you any such matters that come
to our attention.
If you are in agreement with the foregoing, please sign a copy of this letter where indicated and return it
to us.
Sincerely,
CONRAD AND ASSOCIATES, L.LP.
Ken Al-Imam, C.P.A.
Partner
Accepted:
Costa Mesa Sanita District
0tgnature
President
Title
June 23, 2004
Date