Special meeting to special meeting

Despite approval of representation letter on June 11, Saratoga Town Council to hold additional special meeting today on same subject


While the second reading of the budget and budget amendment took up most of the two hour June 11 special meeting of the Saratoga Town Council, the council also discussed a letter of representation to James Childress.

Legal counsel Tom Thompson informed the governing body that he had talked with Childress at the beginning of June and, at that time, he had requested that the town council sign the representation letter before issuing his report.

“James then, thereafter, sent the letter that’s in front of the council,” said Thompson. “I do have concerns about some of the language used in the letter and it would be my advice to council that we do not sign it as is. That there be an amendment to the letter.”

The original representation letter from Childress listed a total of 14 representations. These included the Town’s responsibility for trial balance data incorporated into Childress’ report, departments and associated expenses which represented overhead at the Town of Saratoga and the items “considered as part of the basket for allocation via weighted average of the overhead expenses.”

The letter further read that the Town would assume responsibility for the assumptions used in determining the calculations, that the assumptions were factually supportable and that calculations were appropriately presented and “discloses the significant effects directly attributable to the interfund transfers and estimated overhead allocations.”

“I think it’s important for two reasons,” Thompson said. “One; I think that council and the public is desperately wanting the report from Childress so that you can move forward with your budget and with the different funds that are at issue and, two, I believe that the auditors are waiting on that report before they issue the audit. I think, most significantly, the Town needs a timely audit regardless of what that audit might indicate.

The language proposed by Thompson in place of Childress’ was as follows:

• That we have provided you with all information of which we are aware that is relevant to the preparation and fair presentation of the financial statements such as records, documentation and other matters

• That we have provided you with additional information that you have requested from us for the purpose of the engagement

• That we have provided you with unrestricted access to persons within the Town of Saratoga from whom you determined it necessary to obtain information from

• That we have provided you with minutes of the meetings of the Town of Saratoga or summaries of actions of recent meetings for which minutes have not yet been prepared

• That we have provided you with the audits that you have requested concerning the Town of Saratoga.

Following Thompson’s proposed language, Councilmember Jon Nelson asked if Childress had indicated that he would not provide the report without some disclaimer or that it would limit his liability.

“What I just read to you is not limiting his liability,” Thompson said. “I believe that he will not issue a report without some sort of letter from the Town in regards to those representations.”

“So, we’re at the 11th hour—I mean, it’s 11:49—we’ve got a council meeting Tuesday, two business days, and now we’re in a position that we have to give Childress a letter that says some things regarding his engagement and what we have made available to him or he won’t deliver the report?” asked Nelson.

Thompson stated that he did not want the Town of Saratoga to get into a position in which the report from Childress was delayed due to the governing body not signing the representation letter. He added that all the Town of Saratoga was representing was that they had given Childress access to information, that the access was not restricted and that access was given to Town personnel.

“Does it, in any way, compromise our ability, this council or future councils, to go back and litigate his work? Hypothetical question,” said Nelson.

“If the representations that I’ve just read are, in fact, true, which I believe they are and Suzie and Sammy can correct me if they’re not, then no it does not affect that,” Thompson said.

The council voted 3-1 to allow Mayor John Zeiger to sign a representation letter with the proposed language from Thompson. On Monday afternoon, an email was sent out to members of the Saratoga Town Council and local media that there would be another special meeting on June 17 to allow Zeiger to sign a revision of the representation letter.

The special meeting of the Saratoga Town Council will be at 5 p.m. on June 17 at Saratoga Town Hall.

The next regular meeting of the Saratoga Town Council will be at 6 p.m. on June 23 at Saratoga Town Hall.


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