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City of Little Canada <br />Contract for Auditing Services <br />Page 6 <br />The audit documentation for this engagement will be retained for a minimum of five <br />years after the report release date. If we are aware that a federal awarding agency or auditee <br />is contesting an audit finding, we will contact the party(ies) contesting the audit finding for <br />guidance prior to destroying the audit documentation. <br />Our fee for these services will be at our standard government audit hourly rates plus out - <br />of- pocket costs (such as report reproduction, word processing, postage, travel, copies, <br />telephone, etc.) except that we agree that our gross fee, including expenses, will not exceed <br />$26,000. Our hourly rates vary according to the degree of responsibility involved and the <br />experience level of the personnel assigned to your audit. Our invoices for these fees will be <br />rendered each month as work progresses and are payable on presentation. If we elect to <br />terminate our services for nonpayment, our engagement will be deemed to have been <br />completed upon written notification of termination, even if we have not completed our <br />report. You will be obligated to compensate us for all time expended and to reimburse us for <br />all out -of- pocket costs through the date of termination. The above fee is based on anticipated <br />cooperation from your personnel, completion of workpapers per the City to prepare list by <br />your personnel, and the assumption that unexpected circumstances will not be encountered <br />during the audit. If significant additional time is necessary, we will discuss it with you and <br />arrive at a new fee estimate before we incur the additional costs. <br />Goven vnent Auditing Standards requires that we provide you with a copy of our most <br />recent external peer review report and any letter of comment, and any subsequent peer <br />review reports or letters of comment received during the period of contract. Our 2004 peer <br />review report accompanies this letter as Appendix A. <br />We appreciate the opportunity to be of service to the City of Little Canada, Minnesota <br />and believe this letter accurately summarizes the significant terms of our engagement. If you <br />have any questions, please let us know. If you agree with the terms of our engagement as <br />described in this letter, please sign the enclosed copy and return it to us. <br />Sincerely, <br />HLB TAUTGES REDPATH, LTD. <br />Mark C. Gibbs, CPA <br />MCG:cic <br />823535.1 <br />