sv/ Windsor, Ontario, May 30, 2011 EXECUTIVE STANDING COMMITTEE REPORT NO. 49 of the AUDIT COMMITTEE of its meeting held May 19, 2011 Present: Maxwell Zalev, Chair Bill Carter George Sandala Your Committee submits the following recommendation: ‘That the Audit Committee CONFIRM and RATIFY the Committee Chairperson’s approval of the engagement letter with KPMG to spend up to $80,000 for the resourcing of the AGO for completing the WFCU Centre audit and if additional resourcing work is requested that KPMG BE REQUESTED to advise of that request. (CLERK'S NOTE: ‘The letter from Paul M. Ross, Partner KPMG dated April 20,2011 entitled” WFCU Audit Project” is attached as Appendix “A” as background information. NOTIFICATION The Audit Committee KPMG ~ P. Ross rossi @kpmg.ca CHAIR, COMMITTEE COORDINATORRana KPMG LP Telephone 1519) 747-8800 115 King Street South Fax (519) 747-1432 2nd Floor wernkpmg.ca Watecoo ON NJ 5A, Private and confidential Mr. Maxwell Zalev Chair, Audit Committee City of Windsor 350 City Hall Square West Windsor ON N9A 681 April 20, 2011 Dear Mr. Zalev: Re: WECU Audit Project Further to our recent discussions, we are writing to confirm the terms of your engagement of KPMG LLP ("KPMG") to provide advisory services to the Audit Committee of the City of Windsor (“the Committee"). The purpose of the engagement is to provide assistance to the City of Windsor's Auditor General's Office ("AGO") in completing its review of the WFCU Centre construction Project. ‘You have informed us that in March 2010 the AGO started a review of the construction by the City of Windsor (the "City") of a multi-purpose arena and recreational facility known as the WECU Centre. We understand that due to resource constraints, the AGO is unable to complete that project. Scope of our services In view of these concems, you have asked us to assist you in this matter by undertaking the following: ‘* Review the working papers prepared to date by the AGO * To the extent necessary, test the conclusions formed by the AGO. ‘This testing may include interviews of AGO staff, City staff and re-performance of certain procedures ‘+ Further audit analysis to complete the audit plan previously presented to the Audit Committee ‘* Prepare a written report with our findings, conclusions and recommendations. We understand that you will be responsible for this assignment on behalf of the Audit Committee and that we should report to you. We will report orally on a regular basis regarding the work done, findings, work outstanding and proposed further work. Correspondence will be marked "Private and confidential" and will be addressed to you. APPENDIX “A” MG LL a cradan nd tity prt ol aman feo KF neat ef nena mar rs (Plaid wh RPM ata Coopre FPN Mara Swen ey. HPN Causa pov srs ©Ken TERMS AND CONDITIONS FOR ADVISORY AND TAX SERVICES ‘services hereunder or third party processors. Such personal andior ‘fidertial information may be subject to disclosure in accordance with Jlaws applicable in the jurisdiction in which the information is processed -r sored, Which laws may not prove the same level of protection for such information as will Canadian laws. KPMG's Privacy Officer noted in KPMG's Privacy Policy Is able to answer any individual's questions about the collection of personal information required for KPMG to deliver ‘services hereunder. 9, TAXES/BILLNG/EXPENSES/FEES. ‘a. All fees and other charges do not include any applicable federal, Provincial, of other goods and services or sales taxes, ot any other taxes ‘or duties whether presently in force or imposed in the future. Any such ‘taxes oF duties shall be assumed and paid by Client without deduction from the fees and charges hereunder. b. Bills, Including, without limitation, a charge on account of all reasonable expenses, including travel, meals, accommodations, long ddetance, telecommunicatons, photocopying, delivery, postage, clerical ‘assistance and database research will be rendered on a regular basis as the engagement progresses. Accounts are due when rendered. interest on ‘overdue accounts Is calculated at the rate noted on the invoice ‘commencing 30 days following the date of the invoice. ‘e. Without limiting ts rights or remedies, KPMG shall have the right to that or terminate entirely ts services unl payment is recelved on past due iwices, 40. LatITATION ON WARRANTIES. ‘THIS IS A SERVICES ENGAGEMENT. KPMG WARRANTS THAT IT WILL PERFORM SERVICES HEREUNDER IN GOOD FAITH WITH QUALIFIED PERSONNEL IN A COMPETENT AND WORKMANLIKE MANNER IN ACCORDANCE WITH APPLICABLE INDUSTRY STANDARDS. KPMG DISCLAIMS ALL OTHER WARRANTIES, REPRESENTATIONS OR CONDITIONS, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES, REPRESENTATIONS OR CONDITIONS OF MERCHANTABILITY OR “INES FOR A PARTICULAR PURPOSE. 1 LIMITATION ON LIABILITY. Client agrees that KPMG shall not be liable to Client for any actions, umages, claims, lablites, costs, expenses, or losses in any way arising ‘ut of oF relating to the services’ performed hereunder for an aggregate ‘amount in excess of the fees paid by Client to KPMG under the ‘engagement. On a multiphase engagement, KPMG's lability shall be ‘based on the amount actually pald fo KPMG for the particular phase that ‘ives rise to the laity 1B. In the event of a claim by any third party against KPMG that arises ‘out of or relates to the services performed hereunder, Client wil indemnify KPMG from all such claims, labilties, damages, costs and expenses, Including, without limitation, reasonable legal fees, except to the extent finally determined to have’ resulted from the intentional, deliberate or fraudulent misconduct of KPMG, ‘c.__ Inno event shall KPMG be fable for consequential, special, indirect, incidental, punitive or exemplary damages, costs, expenses, or losses ((ncluding, without limitation, lost profs and opportunity costs). In any action, claim, loss or damages arising out of the engagement, Client ‘agrees that KPMG's Fabilly willbe several and not joint and several. Client ‘may only claim payment from KPMG of KPMG's proportionate share of the total lability based on degree of faut. id. For purposes of this section, the term KPMG shall include ts ‘aseociated and affliated entiies and their respective partners, directors, foffcers and employees. The provisions of this section shall apply regardless of the form of action, damage, claim, Habit, cost, expense, ot Joss, whether in contract, statute, tit (including, without limitation, negligence) or otherwise. 12, LEGAL PROCEEDINGS. CClent agrees to notily KPMG promptly of any request received by CCient from arty court or applicable regulatory authority with respect to the ‘services hereunder, KPMG's advice of report of any related document, W KPMG is required by law, pursuant to government regulation, hbpoera or other legal process or requested by Client to produce ‘documents or personnel as witnesses arising out of the engagement and KPMG is not a party to such proceedings, Client shall reimburse KPMG at ‘standard biling rates for professional time and expenses, including, “TERMS AND CONDITIONS FOR ADVISORY AND TAX SERVICES: May 2010 without imitation, reasonable legal fees, incurted in responding to such requests. . When requested or required by law, subpoena or other legal process ff otherwise, that KPMG provide information and documents relating to Clients affairs, KPMG will use all reasonable efforts to refuse to provide information and documents over which Client asserts legal privilege or which has been acquired or produced in the context of he engagement of legal counsel by of on behalf of Client, except where providing such copies, access or information is required by law, by a provincial Incute/Ordre pursuant to its statutory authority, or @ public oversight board in respect of reporting issuers (both in Canada and abroad) pursuant to its contractual or statutory authority. Where Client provides any document to KPMG in respect of which Client wishes to assert legal Privlege, Client shall clearly mark such document “privieged” and shal ‘alherwise clearly advise KPMG that Client wishes to maintain legal privilege in respect thereof. 13. Liranon Penioo. 'No action, regardless of form, arising under or relating to the engagement, may be brought by either party more than one year after the cause of ‘action has accrued or in any event not more than five years after ‘completion of the engagement in the case of an advisory services fengagement and not more than eight years after completion of the fengagement in the case of a fax services engagement, except that an ‘action for non-payment may be brought by a party net later than one year following the date of the last payment due to such party hereunder. For purposes of this section, the term KPMG shall include its associated and afflated entites and their respective partners, directors, officers and employees. 14, TERMINATION. Unless terminated sooner in accordance with its terms, the engagement ‘shall terminate on the completion of KPMG's services hereunder, which ‘completion shall be evidenced by the delivery by KPMG to Client of the ‘inal invoice in respect ofthe services performed hereunder. Should Client ‘not full its obligations set out herein or in the Engagement Letter and in the absence of rectification by Client within 10 days, KPMG may, upon writen notice, terminate ts performance and will not be responsible for any loss, cos! or expense resulting. The engagement may be terminated by either party at any time by giving written notice to the other party not less than 20 calendar days before the effective date of termination. Upon ‘early termination of the engagement, Client shall be responsible for the ‘payment to KPMG for KPMG's time and expenses incurred up to the termination date, as well as reasonable time and expenses to bring the ‘engagement to a close in a prompt and orderty manner. 18, E-MAL.CoMmUMCATION. Client recognizes and accepts the risks associated with communicating by Intemet e-mail, including (but without limtation) the lack, of securty, unreliability of delivery and possible loss of confidentiality and privilege. Unless Client requests in writing that KPMG does not communicate by Intemet e-mail, Client assumes all responsibilty or liability in respect of risk associated with its use. 416. POTENTIAL CONFLICTS OF INTEREST. Except as otherwise set out herein, Client should be aware that itis not luncommon for KPMG to be auditors andior advisors of more than one of the parties involved in a transaction. In such situations, KPMG takes appropriate measures to ensure that strict confidentiality is maintained in respects. If these circumstances are identified, KPMG will advise Client ‘of that fact, subject to confidentiality requirements, and will consider with (Client what further measures, if any, are appropriate. Client further acknowledges that at some point KPMG may act contrary to Client's interest on unrelated matters, 17. Force MaeuRE. Nether Client nor KPMG shall be liable for any delays resuting from ‘drcumstances of causes beyond its reasonable contro, including, without limitation, fre or other casualty, act of God, strike or labour dispute, war or ‘other violence, or any law, order or requirement of any governmental agency or authority. 18, INDEPENDENT CONTRACTOR. 1X Is understood and agreed that each of the parties hereto is an independent contractor and that neither party is, nor shall be considered to