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HomeMy WebLinkAbout26-1014 Sikich CPA LLC AGREEMENT /14 THIS AGREEMENT is made and entered into this I-1 day of 'Ja ' , 2026, by and between the CITY OF ELGIN, an Illinois municipal corporation (hereinafter referred to as "CITY") and SIKICH CPA LLC, a Virginia limited liability, (hereinafter referred to as "AUDITOR"). WHEREAS, the CITY desires to engage the AUDITOR to furnish certain professional services in relation to auditing services(hereinafter referred to as the"PROJECT"); and WHEREAS, the AUDITOR represents that it is in compliance with Illinois Statutes relating to professional registration of individuals and has the necessary expertise and experience to furnish such services upon the terms and conditions set forth herein below. NOW, THEREFORE, it is hereby agreed by and between the CITY and the AUDITOR that the CITY does hereby retain the AUDITOR for and in consideration of the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged to perform the services relating to the PROJECT as described herein, subject to the following terms and conditions and stipulations,to-wit: 1. SCOPE OF SERVICES A. All work hereunder shall be performed under the direction of the Chief Financial Officer of the CITY,herein after referred to as the"DIRECTOR". B. The Scope of Services, as set forth in an annual statement of work provided by the AUDITOR to the CITY pursuant to this Agreement is attached hereto and made a part hereof as Attachment A. 2. PROGRESS REPORTS A. A project milestone schedule for the PROJECT shall be as determined by the 1)I RECTOR. B. Progress will be recorded on the project schedule and submitted monthly as a component of the Status Report described in C below. C. The AUDITOR will submit to the DIRECTOR monthly a status report keyed to the project schedule. A brief narrative will be provided identifying progress, findings and outstanding issues. 3. WORK PRODUCT All work product prepared by the AUDITOR pursuant hereto including, but not limited to, reports, designs, calculations, work drawings, studies, photographs, models and recommendations shall be the property of the CITY and shall be delivered to the CITY upon request of the DIRECTOR; provided,however,that(i)the AUDITOR's work papers shall remain the sole property of the AUDITOR, and (ii)the AUDITOR may retain copies of such work product for its records. AUDITOR'S execution of this Agreement shall constitute AUDITOR'S conveyance and assignment of all right,title and interest,including but not limited to any copyright interest, by the AUDITOR to the CITY of all such work product prepared by the AUDITOR pursuant to this Agreement, excluding the AUDITOR's work papers. The CITY shall have the right either on its own or through such other consultants as determined by the CITY to utilize and/or amend such work product. Any such amendment to such work product shall be at the sole risk of the CITY. Such work product is not intended or represented to be suitable for reuse by the CITY on any extension to the PROJECT or on any other project, and such reuse shall be at the sole risk of the CITY without liability or legal exposure to the AUDITOR. 4. PAYMENTS TO THE AUDITOR A. For services provided the AUDITOR shall be paid at the hourly billing rate of personnel employed on the PROJECT,with the total fees not to exceed the amounts as set forth in AUDITOR'S dollar cost proposal attached hereto as Attachment B and listed below regardless of the actual costs incurred by the AUDITOR unless substantial modifications in the scope of work are authorized in writing by the CITY and approved by way of written amendment to this Agreement: Fiscal Year Ending December 31, 2026: $85,750 Fiscal Year Ending December 31,2027: $87,470 Fiscal Year Ending December 31,2028: $89,220 Fiscal Year Ending December 31,2029: $91,900 Fiscal Year Ending December 31, 2030: $94,660 B. The not-to-exceed fees listed above includes all reimbursable expenses. C. The CITY shall make periodic payments to the AUDITOR based upon actual progress within thirty(30)days after receipt and approval of invoice. Said periodic payments to the AUDITOR shall not exceed the amounts shown in the following schedule, and full payments for each task shall not be made until the task is completed and accepted by the DIRECTOR. 5. INVOICES A. The AUDITOR shall submit invoices in a format approved by the CITY. Progress reports(2C above)will be included with all payment requests. B. The AUDITOR shall maintain records showing actual time devoted and cost incurred. The AUDITOR shall permit the authorized representative of the CITY to inspect and audit all data and records of the AUDITOR for work done under this Agreement. The AUDITOR shall make these records available at reasonable times -2 - during the Agreement period and for one (1) year after termination of this Agreement. 6. TERMINATION OF AGREEMENT Notwithstanding any other provision hereof, the CITY may terminate this Agreement at any time upon fifteen(15)days prior written notice to the AUDITOR. In the event that this Agreement is so terminated, the AUDITOR shall be paid for services actually performed and reimbursable expenses actually incurred prior to termination, except that reimbursement shall not exceed the task amounts set forth under Paragraph 4 above. 7. TERM This Agreement shall become effective as of the date the AUDITOR is given a notice to proceed and, unless terminated for cause or pursuant to Paragraph 6, shall be deemed concluded on the date the CITY determines that all of the AUDITOR'S work under this Agreement is completed. A determination of completion shall not constitute a waiver of any rights or claims which the CITY may have or thereafter acquire with respect to any term or provision of this Agreement. 8. NOTICE OF CLAIM If the AUDITOR wishes to make a claim for additional compensation as a result of action taken by the CITY,the AUDITOR shall give written notice of his claim within fifteen(15) days after occurrence of such action. No claim for additional compensation shall be valid unless so made. Any changes in the AUDITOR'S fee shall be valid only to the extent that such changes are included in writing signed by the CITY and the AUDITOR. Regardless of the decision of the DIRECTOR relative to a claim submitted by the AUDITOR,all work required under this Agreement as determined by the DIRECTOR shall proceed without interruption. 9. BREACH OF CONTRACT If either party violates or breaches any term of this Agreement, such violation or breach shall be deemed to constitute a default, and the other party has the right to seek such administrative, contractual or legal remedies as may be suitable to the violation or breach; and, in addition, if either party,by reason of any default, fails within fifteen(15)days after notice thereof by the other party to comply with the conditions of the Agreement,the other party may terminate this Agreement. Notwithstanding the foregoing, or anything else to the contrary in this Agreement, with the sole exception of an action to recover the monies the CITY has agreed to pay to the AUDITOR pursuant to Paragraph 4 hereof, no action shall be commenced by the AUDITOR against the CITY for monetary damages. AUDITOR hereby further waives any and all claims or rights to interest on money claimed to be due pursuant to this Agreement, and waives any and all such rights to interest which it claims it may otherwise be entitled pursuant to law, including, but not limited to, the Local Government Prompt Payment Act (50 ILCS 501/1, et seq.), as amended, or the -3 - Illinois Interest Act(815 ILCS 205/1,et seq.),as amended. The parties hereto further agree that any action by the AUDITOR arising out of this Agreement must be filed within one year of the date the alleged cause of action arose or the same will be time-barred. The provisions of this paragraph shall survive any expiration,completion and/or termination of this Agreement. 10. INDEMNIFICATION To the fullest extent permitted by law, AUDITOR agrees to and shall indemnify, defend and hold harmless the CITY,its officers,employees,agents,boards and commissions from and against any and all claims, suits,judgments, costs, attorneys fees, damages or other relief, including, but not limited to, workers' compensation claims, resulting from or arising out of negligent actions or omissions of the AUDITOR in connection herewith, including negligence or omissions of employees or agents of the AUDITOR arising out of the performance of this Agreement; provided, however, that the foregoing duty to indemnify,defend and hold harmless shall not apply to any and all claims,suits,judgments, costs, attorneys fees, damages or other relief, including, but not limited to, workers' compensation claims,resulting from or arising out of the actions or omissions of the CITY, its employees or agents. In the event of any action against the CITY, its officers, employees, agents, boards or commissions, covered by the foregoing duty to indemnify, defend and hold harmless such action shall be defended by legal counsel of the CITY's choosing. The provisions of this paragraph shall survive any expiration,completion and/or termination of this Agreement. 11. NO PERSONAL LIABILITY No official, director, officer, agent or employee of the CITY shall be charged personally or held contractually liable under any term or provision of this Agreement or because of their execution,approval or attempted execution of this Agreement. 12. INSURANCE A. Comprehensive Liability. The AUDITOR shall provide, pay for and maintain in effect, during the term of this Agreement, a policy of comprehensive general liability insurance with limits of at least$1,000,000 aggregate for bodily injury and $1,000,000 aggregate for property damage. The AUDITOR shall deliver to the DIRECTOR a Certificate of Insurance naming the CITY as additional insured. The policy shall not be modified or terminated without thirty(30)days prior written notice to the DIRECTOR. The Certificate of Insurance shall include the contractual obligation assumed by the AUDITOR under Paragraph 10 entitled "Indemnification". -4- This insurance shall be primary and non-contributory to any other insurance or self- insurance programs afforded to the CITY. There shall be no endorsement or modification of this insurance to make it excess over other available insurance. B. Comprehensive Automobile Liability. Comprehensive Automobile Liability Insurance covering all owned, non-owned and hired motor vehicles with limits of not less than $500,000 per occurrence for bodily injury and/or property damage. C. Combined Single Limit Policy. The requirements for insurance coverage for the general liability and auto exposures may be met with a combined single limit of $1,000,000 per occurrence subject to a $1,000,000 aggregate. D. Professional Liability. The AUDITOR shall carry AUDITOR's Professional Liability Insurance covering claims resulting from error, omissions or negligent acts with a combined single limit of not less than $1,000,000 per claim. A Certificate of Insurance shall be submitted to the DIRECTOR as evidence of insurance protection. The policy shall not be modified or terminated without thirty (30)days prior written notice to the DIRECTOR. 13. INTENTIONALLY OMITTED 14. NONDISCRIMINATION/AFFIRMATIVE ACTION The AUDITOR will not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, age, ancestry, order of protection status, familial status, marital status, physical or mental disability, military status, sexual orientation,or unfavorable discharge from military service which would not interfere with the efficient performance of the job in question. AUDITOR shall take affirmative action to comply with the provisions of Elgin Municipal Code Section 5.02.040 and will require any subcontractor to submit to the City a written commitment to comply with those provisions. AUDITOR shall distribute copies of this commitment to all persons who participate in recruitment, screening, referral and selection of job applicants and prospective subcontractors. AUDITOR agrees that the provisions of Section 5.02.040 of the Elgin Municipal Code, as amended, is hereby incorporated by reference, as if set out verbatim. No person shall be denied or subjected to discrimination in receipt of the benefit of any services or activities made possible by or resulting from this Agreement on the grounds of race, color, religion, sex, national origin, age, ancestry, order of protection status, familial status, marital status, physical or mental disability, military status, sexual orientation, or unfavorable discharge from military service. Any violation of this paragraph shall be considered a violation of a material provision of this Agreement and shall be grounds for cancellation, termination or suspension. in whole or in part,of the Agreement by the CITY. 15. ASSIGNMENT AND SUCCESSORS - 5 - This Agreement and each and every portion thereof shall be binding upon the successors and the assigns of the parties hereto; provided, however, that no assignment shall be made without the prior written consent of the CITY. 16. DELEGATIONS AND SUBCONTRACTORS Any assignment, delegation or subcontracting shall be subject to all the terms, conditions and other provisions of this Agreement and the AUDITOR shall remain liable to the CITY with respect to each and every item,condition and other provision hereof to the same extent that the AUDITOR would have been obligated if it had done the work itself and no assignment, delegation or subcontract had been made. Any proposed subcontractor shall require the CITY's advanced written approval. 17. NO CO-PARTNERSHIP OR AGENCY This Agreement shall not be construed so as to create a partnership, joint venture. employment or other agency relationship between the parties hereto. 18. SEVERABILITY The parties intend and agreed that, if any paragraph, sub-paragraph,phrase,clause or other provision of this Agreement, or any portion thereof, shall be held to be void or otherwise unenforceable, all other portions of this Agreement shall remain in full force and effect. 19. HEADINGS The headings of the several paragraphs of this Agreement are inserted only as a matter of convenience and for reference and in no way are they intended to define, limit or describe the scope of intent of any provision of this Agreement, nor shall they be construed to affect in any manner the terms and provisions hereof or the interpretation or construction thereof. 20. MODIFICATION OR AMENDMENT This Agreement and its attachments,along with the engagement letters between the parties executed for each year of the PROJECT,constitutes the entire Agreement of the parties on the subject matter hereof and may not be changed,modified,discharged or extended except by written amendment duly executed by the parties. Each party agrees that no representations or warranties shall be binding upon the other party unless expressed in writing herein or in a duly executed amendment hereof,or change order as herein provided. 21. APPLICABLE LAW This Agreement shall be deemed to have been made in, and shall be construed in accordance with the laws of the State of Illinois. Venue for the resolution of any disputes -6- or the enforcement of any rights pursuant to this Agreement shall be in the Circuit Court of Kane County. Illinois. 22. NEWS RELEASES The AUDITOR may not issue any news releases without prior approval from the DIRECTOR. nor will the AUDITOR make public proposals developed under this Agreement without prior written approval from the DIRECTOR prior to said documentation becoming matters of public record. 23. COOPERATION WITH OTHER AUDITORS The AUDITOR shall cooperate with any other consultants in the CITY's employ or any work associated with the PROJECT. 24. INTERFERENCE WITH PUBLIC CONTRACTING The AUDITOR certifies hereby that it is not barred from bidding on this contract as a result of a violation of 720 ILCS 5/33E et seq. or any similar state or federal statute regarding bid rigging. 25. SEXUAL HARASSMENT As a condition of this contract, the AUDITOR shall have written sexual harassment policies that include, at a minimum, the following information: A. the illegality of sexual harassment; B. the definition of sexual harassment under state law; C. a description of sexual harassment, utilizing examples; D. the vendor's internal complaint process including penalties; E. the legal recourse, investigative and complaint process available through the Illinois Department of Human Rights. and the Illinois Human Rights Commission; F. directions on how to contact the department and commission; G. protection against retaliation as provided by Section 6-101 of the Human Rights Act. A copy of the policies shall be provided by AUDITOR to the Department of Human Rights upon request 775 ILCS 5/2-105. - 7 - 26. SUBSTANCE ABUSE PROGRAM. As a condition of this agreement,AUDITOR shall have in place a written substance abuse prevention program which meets or exceeds the program requirements in the Substance Abuse Prevention Public Works Project Act at 820 ILCS 265/1 et seq. A copy of such policy shall be provided to the City's Assistant City Manager prior to the entry into and execution of this agreement. 27. WRITTEN COMMUNICATIONS All recommendations and other communications by the AUDITOR to the DIRECTOR and to other participants which may affect cost or time of completion, shall be made or confirmed in writing. The DIRECTOR may also require other recommendations and communications by the AUDITOR be made or confirmed in writing. 28. NOTICES All notices, reports and documents required under this Agreement shall be in writing and shall he mailed by First Class Mail, postage prepaid, addressed as follows: A. As to the CITY: Debra Nawrocki Chief Financial Officer City of Elgin 150 Dexter Court Elgin, Illinois 60120-5555 B. As to the AUDITOR: Sikich CPA LLC 1415 W. Diehl Road, Suite 400 Naperville, Illinois 60563 Attention: James Savio, Principal 29. COMPLIANCE WITH LAWS Notwithstanding any other provision of this AGREEMENT it is expressly agreed and understood that in connection with the performance of this AGREEMENT that the AUDITOR shall comply with all applicable federal, state, city and other requirements of law, including, but not limited to,any applicable requirements regarding prevailing wages, minimum wage, workplace safety and legal status of employees. Without limiting the foregoing, AUDITOR hereby certifies, represents and warrants to the CITY that all AUDITOR's employees and/or agents who will be providing products and/or services with respect to this AGREEMENT shall be legal residents of the United States. AUDITOR - 8- shall also at its expense secure all permits and licenses, pay all charges and fees and give all notices necessary and incident to the due and lawful prosecution of the work,and/or the products and/or services to be provided for in this AGREEMENT. The CITY shall have the right, at its own expense, to audit any records in the possession or control of the AUDITOR to determine AUDITOR's compliance with the provisions of this paragraph. In the event the CITY proceeds with such an audit the AUDITOR shall make available to the CITY the AUDITOR's relevant records at no cost to the CITY. 30. COUNTERPARTS AND EXECUTION This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute one and the same agreement. This Agreement may be executed electronically, and any signed copy of this Agreement transmitted by facsimile machine, email, or other electronic means shall be treated in all manners and respects as an original document. The signature of any party on a copy of this Agreement transmitted by facsimile machine,email,or other electronic means shall be considered for these purposes an original signature and shall have the same legal effect as an original signature. IN WITNESS WHEREOF, the parties hereto have entered into and executed this agreement effective as of the date and year first written above. ( IIY ( T\: Richard G. Kozal,City Manager Att s . ity Clerk AUDITOR: SIKICH CPA LLC By: Name/Print: James R.Savio Title: Principal Legal Dept\Agreement\Siktch-Auditor Agr-Redlined-9-23-26 docx - 9 - Attachment A Statement of Work No. 400186-2026-A U D This Statement of Work (this"SOW') dated October 2, 2026 is entered into by and between Sikich CPA LLC ("Sikich", "we," "us," or"our") and City of Elgin ("Client", "you," or"you() pursuant to the Master Professional Services Agreement dated October 14, 2026 between Sikich and the Client (the "Agreement"), all terms of which are hereby incorporated herein by reference. NOW, THEREFORE, for and in consideration of the foregoing premises, and the agreements of the parties set forth below, Sikich and Client agree as follows: Audit scope and objectives The Services to be provided under this SOW will include an audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information and the related disclosures, which collectively comprise the basic financial statements of the Client as of and for the year ended December 31, 2026 (the"financial statements"). Accounting standards generally accepted in the United States of America provide for certain required supplementary information ("RSI"), such as management's discussion and analysis ("MD&A"), to supplement the Client's basic financial statements. Such information, although not a part of the basic financial statements. is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our Services, we will apply certain limited procedures to the Client's RSI in accordance with auditing standards generally accepted in the United States of America ("GAAS"). These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient appropriate evidence to express an opinion or provide any assurance. The following RSI is required by accounting principles generally accepted in the United States of America and will be subjected to certain limited procedures. but will not be audited • Management's Discussion and Analysis • Schedule of Revenues, Expenditures, and Changes in Fund Balance- Budget and Actual, for the General Fund and any major special revenue funds • Schedule of Employer Contributions for the Illinois Municipal Retirement Fund, Police Pension Fund, Firefighters' Pension Fund, and Retiree Health Insurance Fund • Schedule of Changes in the Employer's Net Pension Liability and Related Ratios for the Illinois Municipal Retirement Fund, Police Pension Fund, and Firefighters' Pension Fund • Schedule of Changes in the Employer's Net OPEB Liability and Related Ratios for the Retiree Health Insurance Fund • Schedule of Investment Returns for the Police Pension Fund. Firefighters' Pension Fund, and Retiree Health Insurance Fund • Notes to Required Supplementary Information Page 1 We have also been engaged to report on supplementary information other than RSI that accompanies the Client's financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with GAAS. and we will provide an opinion on it in relation to the financial statements as a whole in a report combined with our auditor's report on the financial statements: • Combining and Individual Fund Financial Statements and Schedules • Schedule of Expenditures of Federal Awards, if applicable • Consolidated Year-End Financial Report (CYEFR), if applicable In connection with our audit of the basic financial statements, we will read the following other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. • Introductory Section • Statistical Section The objectives of our audit are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, issue an auditor's report that includes our opinion about whether your financial statements are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America and report on the fairness of the supplementary information referred to in the paragraph above when considered in relation to the financial statements as a whole. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, and if required, the standards for financial audits contained in the Government Auditing Standards, issued by the Comptroller General of the United States. will always detect a material misstatement when it exists. Misstatements, including omissions, can arise from fraud or error and are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment of a reasonable user made based on the financial statements. The objectives also include reporting on internal control over financial reporting and compliance with provisions of laws, regulations, contracts, and award agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Standards, if applicable. Auditor's responsibilities for the audit of the financial statements We will conduct our audit in accordance with GAAS and, if applicable, the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and will include tests of your accounting records and other procedures we consider necessary to enable us to express such opinions. As part of an audit in accordance with GAAS and Government Auditing Standards, we exercise professional judgment and maintain professional skepticism throughout the audit. Page 2 We will evaluate the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management. We will also evaluate the overall presentation of the financial statements, including the disclosures, and determine whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2)fraudulent financial reporting, (3) misappropriation of assets, or(4) violations of laws or governmental regulations that are attributable to the government or to acts by management or employees acting on behalf of the Client. Because the determination of waste and abuse is subjective, Government Auditing Standards (if applicable). do not expect auditors to perform specific procedures to detect waste or abuse in financial audits nor do they expect auditors to provide reasonable assurance of detecting waste or abuse. Because of the inherent limitations of an audit. combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions, there is an unavoidable risk that some material misstatements may not be detected by us, even though the audit is properly planned and performed in accordance with GAAS and, if required, Government Auditing Standards. In addition. an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform the appropriate level of management of any material errors, fraudulent financial reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. We will also conclude, based on the audit evidence obtained, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the government's ability to continue as a going concern for a reasonable period of time. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts and may include tests of the physical existence of inventories and direct confirmation of receivables and certain assets and liabilities by correspondence with selected customers, creditors, and financial institutions. We will request written representations from your attorneys as part of the provision of Services, and they may bill you for responding to this inquiry. Our audit of the financial statements does not relieve you of your responsibilities. Audit procedures—internal control We will obtain an understanding of Client and its environment. including the system of internal control, sufficient to identify and assess the risks of material misstatement of the financial statements, whether due to error or fraud, and to design and perform audit procedures responsive to those risks and obtain evidence that is sufficient and appropriate to provide a basis for our opinions. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards (if applicable). The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions. misrepresentation. or the override of internal control. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. Accordingly, we will express no such opinion. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards, and if required Government Auditing Standards. Page 3 Audit procedures -compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the Client's compliance with provisions of applicable laws, regulations. contracts, agreements, and grants. However, the objective of our audit will not be to provide an opinion on overall compliance, and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards, if applicable. Examination of management's assertion of compliance We will also examine management's assertion that the Client complied with the provisions of subsection (q) of Section 11-74.4-3 of the Illinois Tax Increment Redevelopment Allocation Act (Illinois Public Act 85- 1142) (the"ITIRAA") during the year ended December 31, 2026. The objectives of our examination are to (1) obtain reasonable assurance about whether management's assertion is free from material misstatement based on the ITIRAA. Our examination will be conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Accordingly. it will include examining on a test basis, your records and other procedures to obtain evidence necessary to enable us to express our opinion. We will issue a written report upon completion of our examination. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion. If our opinion is other than unmodified, we will discuss the reasons with you in advance. If. for any reason, we are unable to complete the examination, or are unable to form or have not formed an opinion, we may decline to express an opinion or may withdraw from this Agreement. Because of inherent limitations of an examination engagement, together with the inherent limitations of internal control. an unavoidable risk exists that some material misstatements may not be detected, even though the examination is properly planned and performed in accordance with the attestation standards. Our report will be intended solely for the information and use of the governing board and management of the government, the Illinois State Comptroller's Office and the joint review board and is not intended to be and should not be used by anyone other than these specified parties. We will plan and perform the examination to obtain reasonable assurance about whether management's assertion of compliance is free from material misstatement, based on the ITIRAA. Our Services will not include a detailed inspection of every transaction and cannot be relied on to disclose all material errors; known and suspected fraud; internal control deficiencies or noncompliance with laws or regulations that may exist. We understand that you will provide us with the information required for our examination and that you are responsible for the accuracy and completeness of that information. Management of the Client is responsible for its assertion and for its compliance with the provisions of subsection (q) of Section 11-74.4-3 of the Illinois Tax Increment Redevelopment Allocation Act and for selecting the criteria and determining that such criteria are appropriate for your purposes. You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the measurement, evaluation, or disclosure of the subject matter(2) additional information that we may request for the purpose of the examination, and (3) unrestricted access to persons within the entity from whom we determine it necessary to obtain evidence. At the conclusion of the examination engagement, you agree to provide us with certain written representations in the form of a representation letter which can be included with the representations made in relation to the audit of the financial statements. Nonattest services Nonattest services expected to be performed by us or an affiliate are as follows: • Assistance in preparing the financial statements based on information provided by you Page 4 These and other nonattest services provided do not constitute an audit under GAAS and. if required, Government Auditing Standards and such services will not be conducted in accordance with GAAS and Government Auditing Standards. We will perform the nonattest services in accordance with applicable professional standards. We, in our sole professional judgment, reserve the right to refuse to perform any procedure or take any action that could be construed as assuming management responsibilities. We will advise management with regard to the nonattest services listed above, but management must make all decisions with regard to those matters. You agree to assume all management responsibilities for the nonattest services we provide. You will be required to acknowledge in the management representation letter the nonattest services provided and that you have evaluated the adequacy of our nonattest services and have reviewed and approved the results of those services prior to their completion and have accepted responsibility for them. Further, you agree to oversee the nonattest services by designating an individual, preferably from senior management, who possesses suitable skill, knowledge. and/or experience; to evaluate the adequacy and results of those services: and accept responsibility for them. Responsibilities of management for the financial statements Our audit will be conducted on the basis that you acknowledge and understand your responsibility for designing. implementing, establishing. and maintaining effective internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, and for evaluating and monitoring ongoing activities to help ensure that appropriate goals and objectives are met; following laws and regulations; and ensuring that management and financial information is reliable and properly reported. Management is also responsible for implementing systems designed to achieve compliance with applicable laws, regulations, contracts, and grant agreements. You are responsible for the selection and application of accounting principles, for the preparation and fair presentation of the financial statements and all accompanying information in conformity with accounting principles generally accepted in the United States of America, and for compliance with applicable laws and regulations and the provisions of contracts and grant agreements, in accordance with GAAS and Government Auditing Standards (if required). Management is responsible for making drafts of financial statements, all financial records and related information available to us; for the accuracy and completeness of that information (including information from outside of the general and subsidiary ledgers); and for the evaluation of whether there are any conditions or events, considered in the aggregate, that raise substantial doubt about the government's ability to continue as a going concern for the 12 months after the financial statements date or shortly thereafter(for example, within an additional three months if currently known). You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, such as records. documentation. identification of all related parties and all related-party relationships and transactions, and other matters: (2) additional information that we may request for the purpose of the audit; and (3) unrestricted access to persons within the Client from whom we determine it necessary to obtain audit evidence. At the conclusion of our audit, we will require certain representation from you about your responsibilities for the financial statements: compliance with laws, regulations, contracts, and grant agreements; and other responsibilities required by GAAS and Government Auditing Standards. if required. Your responsibilities include adjusting the financial statements to correct material misstatements and for confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial. both individually and in the aggregate. to the financial statements of each opinion unit taken as a whole. Page 5 You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the Client involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the Client received in communications from employees, former employees, regulators, or others. In addition. you are responsible for identifying and ensuring that the Client complies with applicable laws, regulations, contracts, agreements, and grants and for taking timely and appropriate steps to remedy fraud and noncompliance with provisions of laws. regulations. or contracts or grant agreements that we report in accordance with GAAS and Government Auditing Standards (if required). You are responsible for the preparation of the supplementary information in conformity with accounting principles generally accepted in the United States of America. You agree to include our report on the supplementary information in any document that contains, and indicates that we have reported on, the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon or make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon. Your responsibilities include acknowledging to us in the written representation letter that (1) you are responsible for presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America: (2) you believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America; (3) the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed. the reasons for such changes); and (4)you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information. With regard to publishing the financial statements on your website (if applicable). you understand that websites are a means of distributing information and, therefore, we are not required to read the information contained in those sites or consider the consistency of other information on the website with the original document. You are responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying and providing report copies of previous financial audits, attestation engagements. performance audits. or other studies related to the objectives discussed in the Audit Scope and Objectives section of this Agreement. This responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting from those audits, attestation engagements, performance audits, or other studies. You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned corrective actions, for the report. and for the timing and format for providing that information. in accordance with GAAS and Government Auditing Standards (if required). If our auditor's report will be included within a document containing other information, such as an annual report, you will be asked to provide the final version of the other information, prior to the date of our auditor's report so that required audit procedures can be completed prior to issuance. If the final version of the other information cannot be obtained prior to the date of our auditor's report. the other information shall be provided as soon as practicable, and you will not issue the annual report prior to providing them to us. If other information is provided after the date of the auditor's report. we may need to take appropriate action in accordance with GAAS, including performing required procedures as soon as practical, communicating the matter to those charged with governance and considering the need to obtain legal advice. If the other information is materially misstated, we will ask management to correct the information or communicate with those charged with governance if management does not correct the information or take other appropriate action to have the uncorrected material misstatement brought to the attention of anyone in receipt of the annual report and the auditor's report. Page 6 Reporting We will issue a written report upon completion of our audit of the financial statements. Our report will be addressed to the City Council of Client. Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to modify our opinions, add a separate section, or add an emphasis-of-matter or other-matter paragraph to our auditor's report, or if necessary, withdraw from this engagement. If our opinions are other than unmodified, we will discuss the reasons with you in advance. If circumstances occur related to the condition of your records, the availability of sufficient, appropriate audit evidence, or the existence of a significant risk of material misstatement of the financial statements caused by error, fraudulent financial reporting, or misappropriation of assets, which in our professional judgment prevent us from completing the audit or forming an opinion on the financial statements. we retain the right to take any course of action permitted by professional standards, including declining to express an opinion or issue a report, or withdrawing from the Agreement. We will also provide a report (that does not include an opinion) on internal control related to the financial statements and compliance with the provisions of laws, regulations. contracts, and grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The report on internal control and on compliance and other matters will state (1) that the purpose of the report is solely to describe the scope of testing of internal control and compliance, and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control on compliance, and (2)that the report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. The report will also state that the report is not suitable for any other purpose. If during our audit we become aware that the Client is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with GAAS and the standards for financial audits contained in Government Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements. Engagement administration, fees and other The assistance to be supplied by Client personnel is described in the workpaper request lists for preliminary (interim) and final fieldwork, which outline the specific schedules and information we are requesting for this Agreement. The workpaper request lists will be discussed and coordinated with Debra Nawrocki, Chief Financial Officer. The timely and accurate completion of this work is an essential condition to our completion of the audit, financial statement preparation, and issuance of our audit report. This SOW assumes all records, documentation, and information we requested in connection with our audit and performance of nonattest services (and outlined in the workpaper request lists) are complete and available at the beginning of the respective phases of the provision of Services. It also assumes key personnel are available to us for the duration of the audit and performance of nonattest services. We understand that your employees will prepare all cash, accounts receivable, and other confirmations we request and will locate any documents selected by us for testing. We are committed to the timely completion of the audit, performance of nonattest services as described above, and delivery of final reports for the fee set forth in this SOW. The fees quoted in this SOW are based on certain assumptions. Circumstances may arise during the engagement that may significantly affect the targeted completion dates or our fee estimate. As a result, changes to the fees may be necessary. Such circumstances include but are not limited to the following: 1. All requested information is not (a) provided by you on the date requested, (b) completed in a format acceptable to Sikich, (c) mathematically correct, (d) complete and accurate, or(e) in agreement with the appropriate Client records (e.g. general ledger accounts, completed trial balance). Sikich will provide you with a separate listing of required schedules, information requests and the dates such items are needed. Page 7 2. Changes to the timing of the engagement due to lack of timeliness by you. or at your request. Changes to the timing of the engagement usually require reassignment of personnel used by Sikich in the performance of services hereunder. However, because it is often difficult to reassign individuals to other engagements, Sikich may incur significant unanticipated costs. 3. Significant delays in responding to our requests for information. such as reconciling variances, providing requested supporting documentation (e.g. invoices, contracts. and other documents). or responding to our inquiries of Client management. 4. Requests by you for Sikich to complete schedules or obtain information previously mutually agreed to be completed by or provided by you. In addition, certain circumstances warranting an adjustment to the fees or a modification to this SOW may include. but are not limited to the following: 1. Requests by you for Sikich to perform nonattest services in addition to those identified and described in the "Nonattest Services" section above. 2. Other time deemed outside the scope of services of the engagement as set forth in this SOW. You may request that we perform additional services not contemplated by this Agreement. If this occurs, we will communicate with you regarding the scope of the additional services and will bill you a mutually agreed upon amount. We may also issue a separate Statement of Work or Change Order covering the additional services. In the absence of any other communication from us outlining such additional services, our services will continue to be governed by the terms of this SOW. Our fees for the Services are detailed in the attached Addendum 1. Final reports will be issued upon your approval of the preliminary drafts. Our engagement ends on delivery of our final report. Any follow-up services that might be required will be a separate, new engagement. The terms and conditions of that new engagement will be governed by a new, specific SOW for that service. Jim Savio is the engagement Principal and is responsible for supervising the provision of Services and signing the report or authorizing another individual to sign it. We expect to begin our audit on approximately March 22, 2027. We will provide copies of our reports to you; however. management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. The audit documentation for this engagement is the property of Sikich and constitutes confidential information. However, subject to applicable laws and regulations. audit documentation and appropriate individuals will be made available upon request and in a timely manner to the granting agency or its designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of our personnel. Furthermore. upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide. to distribute the copies or information contained therein to others, including other governmental agencies. The audit documentation for this engagement will be retained for a minimum of five years after the report release date or for any additional period requested by a regulatory agency. If we are aware that a federal awarding agency or auditee is contesting an audit finding, we will contact the party(ies) contesting the audit finding for guidance prior to destroying the audit documentation. Page 8 In accordance with professional standards, any discussions during the period of the audit engagement between Client and a member of the Sikich audit engagement team regarding potential employment or association with Client creates an impairment of independence for the Sikich employee and possibly the firm. Such a situation could require us to temporarily or permanently remove that person from your audit engagement or to perform additional procedures or re-perform procedures. which would increase our fees. Should we not become aware of the impairment until after the conclusion of the provision of Services, our independence would be deemed to have been impaired. Please inform appropriate Client personnel to refrain from any such discussions with any Sikich staff while the audit Services are ongoing and notify Jim Savio immediately if Client becomes aware that any such discussions may have occurred. This SOW is governed by the terms and conditions of the Agreement. The terms of the Agreement are hereby expressly incorporated by reference into and made a part of this SOW. In the event of a conflict between the terms and conditions of the Agreement and this SOW. the terms of the Agreement shall take precedence and control over those of this SOW unless otherwise expressly and specifically set forth herein. In the event of a conflict between the terms and conditions of this SOW and any related exhibits, attachments, or proposals. the terms of this SOW shall take precedence and control over those of the exhibit, attachment, or proposal hereto unless otherwise expressly and specifically set forth herein. Any capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement. This SOW may be executed (including by facsimile and PDF signature) in one or more counterparts, with the same effect as if the parties had signed the same document. This SOW may be modified or amended only by a written document signed by both parties. Acceptance You acknowledge having read this SOW in its entirety. have had full opportunity to consider its terms in consultation with your attorney, have had full and satisfactory explanation of the same, and fully understand and agree to be bound by the terms of this SOW. Please indicate your understanding and acceptance of this SOW and your intention to be legally bound hereby by executing this SOW in the space provided below and return it to our offices. indicating your authorization for us to proceed on the above terms and conditions. We appreciate the opportunity to be of service to you. If you have any questions, please let us know. Sincerely, James R. Savio. CPA, MAS Principal On behalf of Sikich CPA LLC Acknowledged: City of Elgin Title: 1/777 1r� .c���'j—j Date: /���Q� Page 9 Addendum 1 Schedule of Services & Fees Our fee for these services, consistent with our proposal dated August 14, 2026, will not $80,750 exceed $80,750 for the City audit and the report on compliance with Public Act 85-1142 ($5.000 for the single audit billed separately). This fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. Invoices for fixed fee services will be rendered as the work progresses. The fees listed above include all anticipated expenses such as travel and other out-of-pocket costs (i.e. mileage, postage, etc.) associated with the performance of the listed services. Attachment B SIKICH CPA LLC The fee for the financial audit. single audit of federal expenditures and preparation of the reports specified in our proposal, including all direct and indirect costs, will not exceed $85.750 for the fiscal year ending December 31, 2026 The fees for 2027-2030 would be $87,470, $89,220, $91.900, and $94,660 James R Savio, principal, certify that I am, as a principal of the firm Sikich CPA LLC, entitled to represent the firm, empowered to submit this proposal and authorized to sign a contract with the City of Elgin. James R. Savio L 1`• &•,-4-15-- Date August 14, 2026 The fees include any costs necessary to implement any new pronouncements issued by the Government Accounting Standards Board. These fees assume that the City of Elgin will provide the auditors with electronic copies of adjusted trial balances by individual funds, a year-to-date general ledger with details of postings to all accounts, subsidiary ledgers that agree or are reconciled to the general ledger, and will prepare certain schedules of account analyses and confirmations of account balances. We invoice our clients on a monthly basis as services are provided Payments for all services are due within 60 days of receipt of an invoice Invoices not paid within 60 days are assessed a finance charge of 1 percent per month (12 percent annually).