We serve many municipal governments in Oregon, making our municipal audit practice is one of the largest in the State. We understand thoroughly the work to be done on these engagements, and we have established excellent relationships with the Councils, Boards, and Administrations of these entities.

All of our auditors meet or exceed the GAO’s Government Auditing Standards’ “Yellow Book” and Oregon Board of Accountancy’s continuing education requirements. Our firm is an equal opportunity employer with a diverse staff, and is a small firm as described in OMB Uniform Guidance ( previously known as A-133 ). We are confident you will find our firm has the experience and ability to provide excellent auditing and advisory services.

Due to our extensive experience with municipal engagements, Pauly, Rogers and Co., P.C. has developed specialized audit programs and procedures to ascertain compliance with the many requirements of the Single Audit Act of 1996 and OMB Uniform Guidance ( previously known as A-133 ), the Oregon Revised Statutes and other state and federal audit and reporting requirements. Our professional library contains all available specialized audit programs for federal financial assistance programs. Over 36 of our current municipal engagements and 5 of our non-profit engagements have Single Audits.

Single Audits

All financial statements issued for Oregon Municipal Corporations must conform to the audit and reporting requirements of the Minimum Standards for Audits of Oregon Municipal Corporations, and where applicable, the Government Auditing Standards, 1994 Revision, the Single Audit Act Amendment of 1996, as revised, and OMB Uniform Guidance ( previously known as A-133 ) Audits of States, Local Governments and Non-profit Organizations. The auditors’ reports required by these standards are summarized as follows:

A Comprehensive Annual Financial Report with Single Audit Requirements includes:

• Independent Auditor’s Report.
  
• Auditor comments and disclosures as required by the State of Oregon Regulations which include many of the disclosures in the notes to the financial statements.
  
• Management letter (if necessary), or summary of the audit for presentation to the Governing Board.
  
• Schedule of Expenditures of Federal Awards.
  
• Report on Compliance and on Internal Control over Financial Reporting in Accordance with Government Auditing Standards.
  
• Report on compliance with Requirements Applicable to Each major Program and Internal Control Over Compliance with OMB Uniform Guidance ( previously known as A-133 ).
  
• Schedule of Prior and Current Year Audit Findings and Questioned Costs Relative to Federal Awards.
  
• A copy of the Financial Report, including all of the above applicable reports, is due at the Secretary of State’s office by December 31st each year.

GFOA Certificate of Achievement

We are also available to assist our clients with any technical questions. The GFOA Certificate of Achievement requires strict conformity with professional standards and requiring additional information about the government in the program. There is an expert panel evaluating the government’s submission and progress toward insuring excellence. We have not had a failure to secure or maintain one of these certificates.

Our Process in Conducting a Municipal Audit

Annually, beginning in January, our Firm develops and updates audit programs for all of our Municipal audit clients. This process involves the Firm’s Shareholders, Managers, and In-Charge accountants. This process is designed to develop programs which meet all professional standards of the American Institute of Certified Public Accountants, Government Auditing Standards and the Minimum Standards for Audits of Oregon Municipal Corporations.

To help provide timely audit reports, we normally perform interim work during a mutually agreeable time within the last several months of a client’s fiscal year. During interim work, we perform a review of the accounting records in use and conduct an evaluation of internal control as required by generally accepted auditing standards and, when applicable, Government Auditing Standards. Any deficiencies encountered in the accounting records or internal control, together with our recommendations, are discussed with Management at that time. This procedure may permit implementation of corrective action prior to issuance of the audit report and management letter.

The work we perform includes documentation of our understanding of the client’s system of internal accounting controls, initial testing of the processing controls and initial testing of management’s reconciliation procedures for higher risk balance sheet accounts such as cash and investments. If it is determined that the client needs an audit in accordance with the Single Audit Act, we study and evaluate the internal control system governing the federal financial assistance programs and assess control risk. This is performed using checklists and procedures developed through years of experience and the most current authoritative guidance. Samples are taken and tests performed to ensure processing of data in accordance with prescribed policies and procedures and good management practices. Also, we can document a client’s compliance with many of the laws and regulations applicable to a single audit such as allowable cost, Davis-Bacon Act, and procurement procedures. Any problems encountered during our interim tests are discussed with the client at the conclusion of our on-site interim fieldwork.

An exit conference is conducted at the conclusion of our audit. For our municipal audits we include:

• Preparation of the Minimum Standards Comments and our opinion on the financial statements.
  
• Copies of all adjusted working trial balances and adjusting journal entries at the conclusion of the audit and copies of final lead schedules of our workpapers (where requested).
  
• An entrance conference, progress conference, and exit conference as necessary.
  
• A written report on the internal control structure communicating any reportable conditions to management and communicating our recommendations for enhancing internal controls and improving operational efficiency if any.
  
• Assistance with questions in the areas of accounting, reporting, budgeting, and/or internal control throughout the year as they arise.
  
• Delivery of audit reports as agreed to in the entrance conference each year, with similar dates in succeeding years. We do not allow other engagements to prevent us from delivery on the required dates.

Our substantive testing includes independent confirmations where practical, needed, or examination of subsequent activity when efficient. Our procedures include testing the reconciliation of property tax receipts, confirmation of any revenues received from the State of Oregon, and confirmation of any other significant grants or revenues. Tests of expenditures include both sampling and analytical analysis. We perform detailed review of the financial statements to ensure there are no errors on their preparation. We also complete any grant compliance review.

The review component of a municipal audit includes a review of all workpapers, documents, management/Board communications, and financial reports. We also perform a technical review of the financial statements, a completeness review of the workpapers, and a general review of any important accounting issues, the significant deficiencies letter, if applicable, and the attorney letter.

Because of our extensive experience with governmental audits, we are able to focus on the critical areas and perform the audit in the most efficient manner possible. We can offer valuable suggestions to our municipal clients. We can compare your procedures with other similar entities. These advantages have kept us in the forefront of municipal auditing in Oregon.

Pauly, Rogers and Co., P.C. audits many nonprofit clients and has a 70 year history of involvement in these specialized areas. This experience enables us to perform an efficient and effective audit at a reasonable cost. Due to our extensive experience in this area, we can offer valuable suggestions to an organization’s Board of Directors. These advantages have kept us in the forefront of nonprofit auditing in Oregon.

We will not surprise you about the type and volume of information needed to support the audit. We intend to analyze what is important in your organization, and to develop audit procedures to appropriately assure coverage of these specialized areas.

At our firm, we do not consider audits to be a rote exercise. On the contrary, our audits provide an approachable and cooperative experience for our clients, acting as a powerful tool in helping your organization increase the effectiveness and efficiency of internal controls, reduce unnecessary and costly procedures, provide clear and compliant financial reports, and develop best practices for financial oversight.

The purpose of our audit is to determine whether an organization’s financial statements fairly present its financial position and the results of its operations in conformity with generally accepted accounting principles. We also determine whether an organization has complied with State and Federal laws, regulations, and other contractual provisions that may have a material effect on the audited financial statements.

We begin an audit process by performing a review of the accounting records in use and conduct an evaluation of internal control as required by generally accepted auditing standards. Any deficiencies encountered in the accounting records or internal control, together with our recommendations, are discussed with Management at that time. We consider risk and materiality in determining the extent of audit testing and review necessary. This increases the effectiveness of our audit work.

We engage computer specialists when required. Since our regular audit staff is very experienced in working with computer systems, the use of specialists is infrequent. Our Firm has developed computerized audit techniques, which are used for analytical review purposes and report preparation. These procedures are a standard part of fieldwork on our portable computers. These techniques allow us to increase sample sizes and decrease detection risk. Because the summarization and calculation of the data is done by computer, increases in audit time are minimal. We have written specialized audit programs which aid in the preparation of the financial statements allowing us to post adjusting journal entries in a matter of seconds with changes to the financial statements made automatically.

Our firm has a commitment to service and accessibility. We are committed to:

• Being proactive in identifying changing client needs, wants, and expectations.
  
• Providing services in accordance with the highest standards of ethics and integrity.
  
• Performing all work timely and delivering information in a useable time period. We understand our clients’ time sensitive needs.
  
• Keeping our fees economical and competitive. We know that value is important. No work is performed without our clients’ agreement as to the cost before work is started.
  
• Conveying a personal interest in our clients by assigning a team of professionals to each client to assure maximum client services.
  
• Employing only the highest quality people who are committed to customer service.

We serve a wide range of businesses including manufacturing, personal services, contruction, restaurants, and retailers. Pauly, Rogers and Co., P.C. has extensive experience in auditing numerous accounting systems. We are quite familiar with auditing almost all of the computerized accounting packages available in the market, including QuickBooks. All members of our staff have relevant experience with these systems and all of our auditors have been thoroughly trained in our firm’s computer audit techniques. We have found this increases our efficiency as well as our ability to assist a client’s staff as we conduct our work.

During its history, the firm has been involved in numerous management service engagements. Such engagements have included:

Management Advisory Services

• Development of business strategies.
  
• Efficiency studies.
  
• Staff selection.

Financial Management

• Cash flow analysis.
  
• Business and financial plans.
  
• Strategic planning.

Accounting and Taxation

• Research projects regarding payroll tax concerns.
  
• Accounting policy manual.
  
• Cash flow analysis and projections.
  
• Development of enhanced internal control systems.
  
• Payroll and income tax reviews.
  
• Accounting seminars and presentations.
  
• Accounting system development.
  
• Accounting policy manual development.

To help provide timely audit reports, we normally perform interim work during the last several months of the fiscal year. At this time, we perform a review of the accounting records in use and conduct an evaluation of internal control as required by generally accepted auditing standards. Any deficiencies encountered in the accounting records or internal control, together with our recommendations, are discussed with management at that time. This procedure permits implementation of corrective action prior to issuance of the audit report and management letter. We consider risk and materiality in determining the extent of audit testing and review necessary. This increases the effectiveness of our audit work.