CONTRACT TO AUDIT ACCOUNTS
OF
Hickman County Schools - Internal School Funds
FROM July 01, 2025 TO June 30, 2026
This agreement made this 30th day of September 2025, by and between Matlock Clements. PC. 270 Glenis Drive, Suite A. Murfreesboro, TN 37129,
hereinafter referred to as the "auditor" and Hickman County Schools - Internal School Funds, of 115 Murphree Avenue, Centerville, TN 37033,
hereinafter referred to as the "organization", as follows:
1.
In accordance with the requirements of the laws and/or regulations of the State of Tennessee, the auditor shall perform a financial and
compliance audit of the organization for the period beginning July 01. 2025, and ending June 30, 2026 with the exceptions listed below:
This is an audit of the Internal School Funds and the limited USDA cafeteria procedures. as outline in the Internal School Funds Manual
2.
The auditor shall conduct the audit in accordance with Government Auditing Standards issued by the Comptroller General of the United
States and requirements prescribed by the Comptroller of the Treasury, State of Tennessee, as detailed in the Audit Manual. Additional information and
procedures necessary to comply with requirements of governments other than the State of Tennessee are permissible provided they do not conflict with or
undermine the requirements previously referenced. If applicable, the audit is to be conducted in accordance with the provisions of the Single Audit Act and
Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). The audit is also to be conducted in accordance with any other applicable federal agency requirements. It is agreed that this audit will
conform to standards, procedures, and reporting requirements established by the Comptroller of the Treasury. It is further agreed that any deviation from
these standards and procedures will be approved in writing by the Comptroller of the Treasury prior to the execution of the contract The interpretation of
this contract shall be governed by the above-mentioned publications and the laws of the State of Tennessee.
3.
The auditor shall, as part of the written audit report, submit to the organization's management and those charged with governance:
a)
a report containing an expression of an unmodified or modified opinion on the financial statements, as prescribed by the Audit Manual.
This report shall state the audit was performed in accordance with Government Auditing Standards, except when a disclaimer of opinion
is issued. If the organization is a component unit or fund of another entity, it is agreed that: (a) the financial statements may be included
in the financial statements of the other entity; (b) the principal auditor for the other entity may rely upon the contracted auditor's report;
and (c) any additional information required by the principal auditor of the other entity will be provided in a timely manner.
b)
a report on the internal control and on compliance with applicable laws and regulations and other matters. This report shall be issued
regardless of whether the organization received any federal funding. Audit reports of entities which are subject to the provisions of the
Single Audit Act and OMB's Uniform Guidance shall include the additional reports required by that guidance. The reports will set forth
findings, recommendations for improvement, concurrence or nonconcurrence of appropriate officials with the audit findings, comments
on management's responses as appropriate, and comments on the disposition of prior year findings.
4.
If a management letter or any other reports or correspondence relating to other matters involving internal controls or noncompliance are
issued in connection with this audit, a copy shall be filed with the Comptroller of the Treasury by the auditor. Such management letters, reports, or
correspondence shall be consistent with the findings published in the audit report (i.e., they shall disclose no reportable matters or significant deficiencies
not also disclosed in the findings found in the published audit report). The report should also include a corrective action plan for findings developed under
OMB's Uniform Guidance and for other findings in accordance with Tennessee Code Annotated § 9-3-407, and the Audit Manual. The corrective action
plan is only applicable to findings published in the audit report.
5.
The auditor shall file one (1) electronic copy of said report with the Comptroller of the Treasury, State of Tennessee. The auditor shall
furnish 20 printed copies and/or an electronic copy of the report to the organization's management and those charged with governance. It is anticipated that
the auditor's report shall be filed no later than December 31, 2026. or six (6) months following the period to be audited, whichever is earlier, without
explanation to the Comptroller of the Treasury, State of Tennessee, and the organization. (Audit documentation for additional procedures for
centralized cafeteria systems contracted with audits of internal school funds must be completed and available for review by September 30 following
the fiscal year being audited.) Requirements for additional copies, including those to be filed with the appropriate officials of granting agencies, are listed
below:
6.
The auditor agrees to retain working papers for no less than five (5) years from the date the report is received by the Comptroller of the
Treasury, State of Tennessee. In addition, the auditor agrees that all audit working papers shall, upon request, be made available in the manner requested by
the Comptroller for review by the Comptroller of the Treasury or the Comptroller's representatives, agents, and legal counsel, while the audit is in progress
and/or subsequent to the completion of the report. Furthermore, at the Comptroller's discretion, it is agreed that the working papers will be reviewed at the
office of the auditor, the entity, or the Comptroller and that copies of the working papers can be made by the Comptroller's representatives or may be
requested to be made by the firm and may be retained by the Comptroller's representatives.
7.
Any reasonable suspicion of fraud, (regardless of materiality) or other unlawful acts including, but not limited to, theft, forgery, credit/debit
card fraud, or any other act of unlawful taking, waste, or abuse of, or official misconduct, as defined in Tennessee Code Annotated § 39-16-402, involving
public money, property, or services shall, upon discovery, be promptly reported in writing by the auditor to the Comptroller of the Treasury, State of
Tennessee, who shall under all circumstances have the authority, at the discretion of the Comptroller, to directly investigate such matters. Not withstanding
anything herein to the contrary, the Comptroller of the Treasury, State of Tennessee, acknowledges that the auditor's responsibility hereunder is to design its
audit to obtain reasonable, but not absolute, assurance of detecting fraud that would have a material effect on the financial statements, as well as other illegal
acts or violations of provisions of contracts or grant agreements having a direct and material effect on financial statement amounts If the circumstances
disclosed by the audit call for a more detailed investigation by the auditor than necessary under ordinary circumstances, the auditor shall inform the
February 2023
organization's management and those in charge of governance in writing of the need for such additional investigation and the additional compensation
required therefor. Upon approval by the Comptroller of the Treasury, an amendment to this contract may be made by the organization's management, those
charged with governance, and the auditor for such additional investigation.
8.
Group Audits. The provisions of Section 8 relate exclusively to contracts to audit components of a group under AU-C 600. (See definitions
in AU-C 600, Paragraph 11.) Section 8 is only applicable to an auditor that audits a component (e.g., a fund, component unit, or other component) of a
county government that is audited by the Division of Local Government Audit (LGA). Section 8 is intended to satisfy the communication requirements
for the group auditor (LGA) to the component auditor under AU-C 600.
a)
The Division of Local Government Audit (LGA) shall be considered the "group auditor" for any contract to audit a component of an
applicable county government. LGA shall present the county's financial statements in compliance with U.S. Generally Accepted
Accounting Principles (GAAP) as promulgated by the Governmental Accounting Standards Board (GASB). LGA shall conduct the audit in
accordance with auditing standards generally accepted in the United States of America and the auditing standards applicable to financial
audits contained in Government Auditing Standards issued by the Comptroller General of the United States.
b)
The contracting auditor shall be considered the "component auditor" for purposes of this section.
c)
The financial statements audited by the component auditor should be presented in accordance with GAAP as promulgated by
GASB. If the financial reporting framework for any component does not conform to this basis, the financial reporting framework should be
disclosed in Section 10 (Special Provisions). (Component financial statementsthat are not presented using the same financial reporting
framework as the county's financial statements may cause this contract to be rejected)
d)
The component auditor shall conduct the component audit in accordance with auditing standards generally accepted in the United
States of America and the auditing standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States.
e)
The component auditor shall cooperate with LGA to accomplish the group audit. It is anticipated that LGA will make reference to
the component auditor's report in the group audit report. Should LGA find it necessary to assume responsibility for the component auditor's
work, the terms, if any, shall be negotiated under a separate addendum to this contract.
f)
The component auditor shall follow the ethical requirements of Government Auditing Standards and affirms that the component
auditor is independent to perform the audit and will remain independent throughout the course of the component audit engagement.
g)
The component auditor affirms that the component auditor is professionally competent to perform the audit LGA may confirm
certain aspects of the component auditor's competence through the Tennessee State Board of Accountancy.
h)
The component auditor will be contacted via email by the LGA's Audit Review Manager with the estimated date of the conclusion
of LGA's audit of the county government. The component auditor agrees to update subsequent events between the date of the component
auditor's report and the date of the conclusion of LGA's audit of the county government Additional subsequent events should be
communicated via email to LGA's Audit Review Manager.
i)
The component auditor shall read LGA's audited financial statements for the county government for the previous fiscal year noting
in particular related parties in the notes to the financial statements, and material misstatement findings in the Findings and Questioned
Costs Section. The previous year audited financial statements can be obtained from the Comptroller's website at www.comptroller.tn.gov.
As required by generally accepted auditing standards, we have identified Management Override of Controls and Improper Revenue
Recognition as presumptive fraud risks. The component auditor shall communicate to LGA (i.e., group management) on a timely basis
related parties not previously identified by the group management in LGA's prior year audited financial statements. Related parties should
be communicated via email to LGA's Audit Review Manager.
j)
The component auditor's report should not be restricted as to use in accordance with AU-C 905.
k)
Sections 1-7 and Sections 10-14 of this contract are also applicable to the component auditor during the performance of the
component audit.
9.
Municipal Chart of Accounts Crosswalk The provisions of Section 9 relate exclusively to contracts to audit of a municipality,
municipality's fund(s), and municipality's school board of education. The auditor shall convert respective municipal audited financial data into a condensed
chart of accounts by use of a Microsoft Excel crosswalk tool prescribed by the Comptroller of the Treasury, State of Tennessee, or if a respective
municipality, municipality's fund(s), or municipality's school board of education chooses to convert their own audited financial data by use of the crosswalk,
the auditor shall verify the accuracy of their conversion. The completed condensed chart of accounts crosswalk in Microsoft Excel format shall be filed with
the Comptroller of the Treasury, State of Tennessee, by the auditor when the audited financial report is submitted.
10.
(Special Provisions)
11.
In consideration of the satisfactory performance of the provisions of this contract, the organization shall pay to the auditor the fce(s) listed
below. (Fees may be fixed amounts or estimated.)
Fixed Contract Fee:
Audit $35,000.00
Municipal Chart of Accounts Crosswalk $0.00
Total Fixed Contract Fee $35,000.00
or
Estimated Contract Fee:
Audit
Municipal Chart of Accounts Crosswalk
Total Estimated Contract Fee
(If not a fixed amount, an estimated contract fee should be furnished to the governing unit for budgetary purposes. A schedule of fees and/or rates should be
set forth below. Interim billings may be arranged with consent of both parties to this contract.) Provision for the payment of fees under this agreement has
been or will be made by appropriation of management and those charged with governance.
SCHEDULE OF FEES AND/OR RATES:
February 2023
12.
As the authorized representative of the firm, I do hereby affirm that:
our firm and all individuals participating in the audit are in compliance with all requirements of the Tennessee State Board of
Accountancy and;
our firm has participated in an external quality control review at least once every three (3) years, conducted by an organization not
affiliated with our firm, and that a copy of our most recent external quality control review report has been provided to the organization
and the office of the Tennessee Comptroller of the Treasury approving this contract;
all members of the staff assigned to this audit have obtained the necessary hours of continuing professional education required by
Government Auditing Standards;
all auditors participating in the engagement are independent under the requirements of the American Institute of Certified Public
Accountants and Government Auditing Standards.
13.
This writing, including any amendments or special provisions, contains all terms of this contract. There are no other agreements between the
parties hereto and no other agreements relative hereto shall be enforceable, unless entered into in accordance with the procedures set out herein and
approved by the Comptroller of the Treasury, State of Tennessee. In the event of a conflict or inconsistency between this contract and the special provisions
contained in paragraph 10 of this contract, the special provision(s) are deemed to be void. Any changes to this contract must be agreed to in writing by the
parties hereto and must be approved by the Comptroller of the Treasury, State of Tennessee, All parties agree that the digital signatures, that is, the
electronic signatures applied by submitting the contract, are acceptable as provided for in the Uniform Electronic Transaction Act Any paper documents
submitted related to this contract will be converted to an electronic format and such electronic document(s) will be treated as the official document(s).
14.
If any term of this contract is declared by a court having jurisdiction to be illegal or unenforceable, the validity of the remaining terms will
not be affected, and, if possible, the rights and obligations of the parties are to be construed and enforced as if the contract did not contain that term.
Matlock Clements, PC
Audit firm
Governmental Unit or Organization
Andy Matlock, CPA
By
By
Signature
Signature
Title/Position:
Audit Manager
Title/Position:
E-mail address:
eric@matlockclements.com
E-mail address:
Date:
October 01, 2025
Date:
Approved by the Comptroller of the Treasury, State of Tennessee
For the Comptroller:
By
Date:
February 2023