Loading...
HomeMy WebLinkAboutBradley Lake PMC Proposal for Audit Services of Special-Purpose Financial Statements 08-07-2012Bradley Lake Project Management Committee Proposal for Audit Services of Special-Purpose Financial Statements (Request for Proposal No. 12-01) SWALLING & ASSOCIATES Certified Public Accountants & Business Advisers SWALLING & ASSOCIATES Certified Public Accountants & Business Advisers July 23, 2012 To the Bradley Lake Project Management Committee Anchorage, Alaska We are pleased to present our proposal to provide audit services for the Bradley Lake Project Management Committee Operating and Revenue Funds (Project) beginning with the fiscal year ending June 30, 2013. This proposal includes an introduction to our firm, discussion of our qualifications, proposed engagement team and related resumes, copy of our latest peer review, fee proposal and standard hourly rates, selected client references, proof of liability and professional practice insurance, and our proposed engagement letter. We are well qualified to perform the engagement and are committed to providing services that will meet or exceed your expectations. We have ongoing experience with the Bradley Lake Project Management Committee and with the utility industry in Alaska. As a result, we are already familiar with the accounting of the Project and the special-purpose financial reporting. We propose to continue to the involvement of the current engagement team consisting of Gary Dixon — shareholder, Bonnie Godfred — senior manager, Lynn Ragle — senior accountant, and Erin Austin — staff accountant. All of the team members are familiar with the Project’s accounting and special-purpose financial statements. We can provide the Project our local Alaskan expertise combined with national and international accounting resources through our membership in DFK International/USA. DFK maintains standards for membership, including membership in the Private Companies Practice Section of the American Institute of Certified Public Accountants. Our proposal is valid for 60 days from July 31, 2012. If you have questions about our proposal we would be pleased to meet with you or to provide additional information at your convenience. Very truly yours, 3201 C Street, Suite 405 : Anchorage, Alaska 99503 Independent member of DFK International -a worldwide association of independent accounting firms and business advisers Ph 907.563.7977 + Fax 907.561.7683 + www.swallingcpas.com An Introduction to Our Firm Swalling & Associates, P.C. is a certified public accounting firm founded in 1991 by John C. (Chris) Swalling. Gary Dixon and Wayne Eski joined the firm as shareholders in 1994 and 2001, respectively. We are a full service local accounting firm with significant experience providing comprehensive financial reporting, income tax, and related accounting services to a wide variety of businesses and industries. Our firm is a member of DFK/USA, an association of independent, full-service accounting and consulting firms with offices serving major markets throughout the United States. The association is affiliated with DFK International, headquartered in London, with offices in over 80 countries. The purpose of our membership is to share technical expertise and practice-management information, opportunities for business referral, and to provide the resources to serve clients on a national and international level. The hallmark of our practice is our commitment to personal involvement with clients. We believe our approach to client service sets us apart from other accounting firms. We strive to provide straight-forward thinking and practical advice about complex matters. We are committed to building trust with our clients though insight and involvement. Our shareholders and managers take a hands-on approach and are heavily involved in all aspects of an audit engagement. We believe that our commitment to senior management participation in the fieldwork results in a more meaningful and efficient process, and sets us apart from many other accounting firms. Due to our depth of experience, education, and diverse backgrounds, we can provide complex financial reporting, tax planning and compliance, litigation support and management consulting services at a high level not usually associated with local accounting firms. From the outset, our firm has been committed to understanding the unique needs of our clients and providing services to meet those needs. Emphasis is placed on developing highly skilled professionals who are trained and experienced in specific client service areas. Within the firm these services are: Financial Reporting — Attest Services Income Tax Planning and Compliance Consulting, Litigation Support and Other Accounting Services The firm’s core client base is broad in terms of the industries represented and the sizes of the companies served. Organizations for which we perform annual audits or reviews of financial statements range in size from start-up companies to those with more than $50 million in revenues. We also provide compilation services for clients who do not require audited or reviewed financial statements. The tax planning and compliance area is staffed by tax professionals with the expertise to handle complex federal and multi-state tax matters. Although compliance work is important, a primary emphasis of our tax professionals is on tax planning and minimization — not only for current tax law issues, but also alternative planning strategies based on pending or proposed legislation. Our consulting, accounting and advisory services area supports the accounting and financial management needs of smaller businesses and the offices of professionals. We are organized so that we can provide accounting services at whatever level a client requires. In some cases we have provided the total bookkeeping and/or accounting function. For some of our clients with their own accounting departments we have served as interim Controller/CFO on an as- needed basis. The diverse experience of key members of the firm permit us to offer other specialized services such as litigation support services, expert witness testimony, real estate advisory services, development of incentive compensation plans and financial-accounting executive search, recruitment and interviewing. Qualifications and Engagement Team Our firm employs a stable team of experienced professionals that include many with national firm backgrounds. We are committed to investing in and retaining our professional staff and we believe this philosophy benefits our clients over the long-term. Our firm maintains an Alaska business license and holds a permit from the Alaska State Board of Public Accountancy to practice as a certified public accounting firm. There are no complaints, past or current, filed against our firm with the State Boards of Accountancy in any states. The firm is a member of the American Institute of Certified Public Accountants Private Companies Practice Section(PCPS) and received a peer review report without letter of comments most recently in November 2011. (peer review letter enclosed) Our shareholders and managers are active members of the Alaska Society of Certified Public Accountants. We anticipate that Gary Dixon will have overall responsibility for the Project audits. Bonnie Godfred will provide independent review and additional technical expertise on accounting matters. The primary fieldwork will be performed by Lynn Ragle, one of our most experienced senior auditors and Erin Austin, another experienced auditor. Both Lynn Ragle and Erin Austin have worked on prior audits of the Project and are familiar with the accounting functions provided for the Project at the AEA offices. Gary Dixon and Bonnie Godfred have provided engagement management and technical assistance during audits over the past years. We may assign additional audit staff at our discretion, if considered appropriate after completion of audit planning. (resumes enclosed) We would expect to begin the audit fieldwork in late October for purposes of meeting the December issuance deadline as described in your request for proposal. Audit planning and correspondence would be performed at a mutually convenient time after the fiscal year end and prior to commencement of the year end fieldwork. If awarded the engagement, we will maintain in force at all times and will supply evidence upon request: professional liability insurance, workers’ compensation insurance, and general liability insurance. (proof of insurance enclosed) Professional Fees Like other professional accounting firms, our fees are directly related to the time spent by our shareholders, managers, and staff to perform the applicable services. We have found that controlling fees and rendering outstanding service are not inconsistent objectives. In our efforts to be effective with our fees, we coordinate our efforts with your personnel to reduce our time requirements without impairing the quality of our services. The following fee estimates were determined dependent upon receiving assistance from your personnel consistent with recent audits. We anticipate this assistance to include preparation of schedules requested, drafting the financial statements, obtaining required documentation during the audit and researching accounting matters. The fees assume all accounting records and the special-purpose financial statements conform to the accounting requirements of the Project’s Operating and Revenue funds. Special-Purpose Financial Statement Audit Fees Year ended June 30, 2013 $14,750 Year ended June 30, 2014 $15,500 Year ended June 30, 2015 $16,250 Additional two years to be adjusted from preceding year by an applicable cost index, subject to further adjustment for changes in conditions as described below, if any. The fees are based upon the activities of the Project through June 30, 2011, and assume there are no significant changes in those activities and related accounting matters during the years being audited. Our fees are also subject to revision for changes in scope of the engagement, changes in auditing standards, changes in the accounting policies and procedures of the Project, changes in recordkeeping of the Project and other conditions that would be outside the control of the auditor. If significant changes have occurred or subsequently occur, we will discuss the appropriate adjustment in fees with you prior to commencement of additional services that may be necessary. We do not expect significant out-of-pocket or similar costs such as mileage, reproduction, typing, etc. However, we will bill you for out-of-pocket costs as incurred. Our invoices may be rendered as frequently as monthly as work progresses and are payable upon presentation. Our base audit fees do not include special services not normally contemplated in an audit of financial statements such as consulting, special meetings with management, accounting assistance, research, and other special services. We will discuss the estimated amount of fees for additional services you may request before commencing work. Our standard hourly fees are generally based upon the level of professional staff, time involved, other factors such as the complexity of an issue, plus out-of-pocket expenses, if any. Our 2012 rates vary depending on the nature of the services and the level of personnel utilized as follows: Shareholders & Senior Managers $225 - $300 e e Managers $140 - $190 e Professional staff (seniors/staff) $ 95 - $150 e Other staff (admin/paraprofessional) $55) i-1/'$) (85 We are sensitive to concerns regarding professional fees for accounting services. We want our clients to receive the maximum value for our professional services and to perceive that our fees are reasonable and fair. In working to provide you with such value, we find there are certain circumstances that can cause us to perform work in excess of that contemplated by our fee estimate. Following are some of the more common reasons. Changing Laws and Regulations There are many governmental and rule-making boards that regularly add or change their requirements. Although we attempt to plan our work to anticipate the requirements that will affect our engagement, there are times when this is not possible. We will discuss these situations with you at the earliest possible time in order to make the necessary adjustments and amendments in our engagement. Incorrect Accounting Methods or Errors in Your Records We base our fee estimates on the expectation that client accounting records are in order so that our work can be completed using our standard testing and auditing procedures. However, should we find errors, incomplete records, or the application of incorrect accounting methods, we will have to perform additional work to make the corrections and reflect these changes in the financial statements. Failure to Prepare for the Engagement In an effort to minimize your fees, we assign responsibility for the preparation of schedules and documents needed for the engagement. We also discuss matters such as availability of your key personnel, deadlines, and work space. If your personnel are unable, for whatever reasons, to provide these materials as previously agreed to, it might substantially increase the work we must do to complete the engagement within the scheduled time. Starting and Stopping Our Work If we must withdraw our staff because of the condition of your records, or the failure to provide agreed upon materials within the established timeline for the engagement, we will not be able to perform our work in a timely, efficient manner, as established by our engagement plan. This will result in additional fees as we must reschedule our personnel and incur additional start-up costs. Audit Methodology The methodologies we utilize are designed to combine the attributes of cost effectiveness and quality control. We tailor our approach to the specific entity. During our initial audit procedures, we focus on understanding the systems and controls used for financial accounting and reporting. Based upon this understanding, we will determine an audit approach based on internal controls and substantiation of account balances. We exercise professional judgment rather than merely performing mechanical tasks or a repeat of a prior year’s procedures. When providing our services, we will coordinate our work with your accounting staff. After our preliminary review of procedures and controls, we will prepare a request for necessary materials and analysis of information required to complete the services. We will also establish key dates for progress and review of the draft report. As noted elsewhere in this proposal, we primarily employ seasoned, experienced accountants. To ensure efficiency and develop relationships, we make every effort to provide continuity of the primary staff assigned to your engagement. We draw on areas of expertise within our personnel to assist the team in technical matters as appropriate. Client References We offer the following client references you may contact regarding attest services we have provided: Jolene Anderson Furniture Enterprises of Alaska, Inc. 940 East 38" Avenue, Anchorage, AK 99503-6100 624-5203 Janis Schnell Norgasco, Inc. 4341 B Street, Suite 306, Anchorage, AK 99502 562-5520 Bill Polley Tanacross, Inc. P.O. Box 76029, Tanacross, AK 99776 787-8465 Sample Audit Engagement Letter yes Mr. Brad Evans, Chair Bradley Lake Project Management Committee c/o Chugach Electric Association, Inc. 5601 Electron Drive, Building A Anchorage, Alaska 99519-6300 We are pleased to confirm our understanding of the services we are to provide for the Bradley Lake Project Management Committee for the year ended June 30, 2013. We will audit the special-purpose balance sheet of the Bradley Lake Project Management Committee Operating and Revenue Funds as of June 30, 2013, and the related special- purpose statements of revenues and expenses, and of cash flows for the year then ended. Audit Objective The objective of our audit is the expression of an opinion about whether your special- purpose financial statements are fairly presented, in all material respects, in conformity with accounting requirements of the Project. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and will include tests of your accounting records and other procedures we consider necessary to enable us to express such an opinion. If our opinion is other than unqualified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or to issue a report as a result of this engagement. Audit Procedures Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, direct confirmation of receivables and certain other assets and liabilities by correspondence with selected parties to the underlying transactions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from management about the special-purpose financial statements and related matters. Page 2 Mr. Brad Evans, Chair Bradley Lake Project Management Committee __,2013 An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special-purpose financial statements. We will plan and perform the audit to obtain reasonable assurance about whether the special- purpose financial statements are free of material misstatement, whether from errors, fraudulent financial reporting, misappropriation of assets, or violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. 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 a risk that material misstatements may exist and not be detected by us even though the audit is properly planned and performed in accordance with U.S. generally accepted 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 you of any material errors or any fraudulent financial reporting or misappropriation of assets that comes to our attention. We will also inform you 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. Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. An audit is not designed to provide assurance on internal control or to identify deficiencies in internal control. However, during the audit, we will communicate to you and those charged with governance internal control related matters that are required to be communicated under professional standards. Management Responsibilities You are responsible for making all management decisions and performing all management functions; for designating an individual with suitable skill, knowledge, or experience to oversee any nonattest services we provide; and for evaluating the adequacy and results of those services and accepting responsibility for them. Page 3 Mr. Brad Evans, Chair Bradley Lake Project Management Committee __, 2013 You are responsible for establishing and maintaining internal controls, including monitoring ongoing activities; for the selection and application of accounting principles; and for the fair presentation in the special-purpose financial statements of assets, liabilities, and surplus, revenues and expenses, and cash flows in conformity with the accounting requirements of the Project. You are also responsible for making all financial records and related information available to us and for the accuracy and completeness of that information. Your responsibilities include adjusting the financial statements to correct material misstatements and 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 taken as a whole. 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 company involving (a) management, (b) employees who have significant roles in internal control, and (c) 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 Project received in communications from employees, former employees, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws and regulations. Engagement Administration, Fees, and Other We understand that your employees will prepare all confirmations and schedules we request and will locate any documents selected by us for audit testing. During the course of our engagement, we may need to electronically transmit confidential information to each other or third parties engaged by you.. Email is a fast and convenient way to communicate. However, email travels over the public internet, which is not a secure means of communication and, therefore, confidentiality could be compromised. We will endeavor to password-protect or encrypt email attachments created by us containing sensitive information. You agree to the use of email and other electronic methods to transmit and receive information, including confidential information between Swalling & Associates, P.C. and you and between Swalling & Associates, P.C. and other third parties engaged by you. Gary Dixon is the engagement partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it. We expect to begin the audit at a mutually agreeable date in the third week of October or thereafter and issue our report in the first week of December. Page 4 Mr. Brad Evans, Chair Bradley Lake Project Management Committee __, 2013 Fees for these services will be based on the actual time spent at our standard hourly rates, subject to the fee specifications provided in our proposal. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. You will also be billed for travel and other out-of- pocket costs such as report production, typing, postage, etc. Our invoices for these fees will be rendered as frequently as monthly as work progresses and are payable on presentation. The fee specifications in our proposal letter are based on anticipated cooperation from your personnel and the assumptions 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. We appreciate the opportunity to be of service to you and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, Swalling & Associates, P.C. RESPONSE: This letter correctly sets forth the understanding of Bradley Lake Project Management Committee: Representative’s signature: Title / Date Members of the Engagement Team GARY N. DIXON, SHAREHOLDER SWALLING & ASSOCIATES, P.C. ENGAGEMENT RESPONSIBILITIES Mr. Dixon joined the firm in 1994 and has provided accounting services in Alaska, Washington and California since 1979. He previously was a Senior Manager in offices of Ernst & Young during which time his responsibilities encompassed managing services to clients in a variety of industries, consulting on accounting, reporting and SEC matters for clients throughout the West Region, and development and presentation of training seminars. His responsibilities include providing auditing, accounting and tax services to businesses and individuals. RELEVANT EXPERIENCE Accounting and auditing services for private and public companies, not-for-profits, and governmental entities. Services have been provided to various industries including financial services, retail and distribution, utilities, real estate development, health care and manufacturing. Tax planning and compliance services for corporations, individuals and partnerships. Advising companies involved in a variety of financing and acquisition transactions including bank debt, commercial paper, debt and equity offerings, spin-offs, mergers, and leveraged buyouts. Consulting with clients on technical matters involving accounting principles, financial reporting, emerging issues and SEC rules and regulations. Analyzing financial data and assisting clients with the valuation of businesses and real estate, and the preparation of forecasts and projections. EDUCATION Mr. Dixon is a graduate of the University of Washington with a Bachelor of Arts in Business Administration-Accounting. He has also completed graduate courses in taxation at Golden Gate University. Mr. Dixon is a licensed Certified Public Accountant in Alaska, California and Washington. GARY N. DIXON (Continued) ASSOCIATIONS Mr. Dixon is involved in both professional and community organizations. These include: American Institute of Certified Public Accountants Alaska Society of Certified Public Accountants President 2004 Board of Directors 1999 - 2005 Hagelbarger Trustee 2010 - 2012 Accounting and Auditing Committee Alaska World Affairs Council Board of Directors Treasurer Anchorage Community YMCA Board of Directors California Board of Accountancy Past Chairman, Positive Enforcement Committee California Society of Certified Public Accountants Past Member, Accounting Principles and Auditing Standards Committee BONNIE SCHRADER GODFRED, SENIOR MANAGER SWALLING & ASSOCIATES, P.C. RESPONSIBILITIES Ms. Godfred has provided accounting services in Alaska since 1975. Prior to coming to Alaska, she worked in public accounting in Washington State for five years. Ms. Godfred was a partner in a national CPA firm from 1979 to 1988. She was in charge of the accounting and auditing department and has experience in a variety of industries. Her present responsibilities include providing auditing, accounting and tax services to small to medium sized businesses, in addition to supervising staff and performing technical reviews of compilation, review and audit engagements. EXPERIENCE Ms. Godfred has extensive experience in accounting and auditing services. She has also provided tax planning and preparation services to corporations, partnerships, estates and trusts, and individuals. Her experience includes services provided to the following industries: Real estate, Alaska Native (ANCSA) Corporations, retirement and benefit trusts, insurance companies, retail and wholesale and health care. EDUCATION Ms. Godfred is a graduate of the University of Washington with a Bachelor of Arts in Business Administration-Accounting. Cp A 7 wall ys ASSOCIATIONS Ms. Godfred is involved in both professional and community organizations. These include: American Institute of Certified Public Accountants . Alaska Society of CPAs: President 1982 President-elect 1981 Secretary Treasurer Continuing Education Committee Hagelbarger Trustee 1998 — 2001 Public Service Award Anchorage Telephone Utility Board of Directors: Vice-Chair 1992 - 1994 Secretary 1994 - 1999 Audit & Finance Committee Chair 1992 - 1999 BONNIE SCHRADER GODFRED (Continued) Breast Cancer Focus, Inc. 1999-present Anchorage 2000 New Year’s Eve Advisory Committee 1999 Congregation Beth Sholom: Board 1992 Finance Committee 1992 - 1994 Building Finance Committee 1987-88 Served on Boards of: Anchorage Opera Anchorage Repertory Theatre Basically Bach Festival Friends of the Library State of Alaska Medicaid Rate Commission LYNN N. RAGLE, SENIOR ACCOUNTANT SWALLING & ASSOCIATES, P.C. RESPONSIBILITIES Ms. Ragle joined the professional staff of Swalling & Associates, P.C. in January, 1996. Ms. Ragle has responsibility for work on audits, compilations and financial statement reviews and for preparation of income tax returns. EXPERIENCE Participation in audits for clients in industries, such as retail sales, utilities, insurance and retirement plans. Preparation of Federal and State income tax returns for individuals, corporations, partnerships, trusts and non-profit entities. Working knowledge of several tax preparation, spread sheet and word processing applications. EDUCATION Ms. Ragle has a BBA degree in accounting from the University of Alaska, Anchorage, and a BA degree in biology from The College of Wooster in Wooster, Ohio. ERIN A. AUSTIN, STAFF ACCOUNTANT SWALLING & ASSOCIATES, P.C. RESPONSIBILITIES Ms. Austin joined Swalling & Associates, P.C. in August, 2009. She is responsible for participation in audit, review and compilation engagements, preparing income tax returns, and providing accounting services to clients in a variety of industries. EXPERIENCE Client audits and financial statement engagements in a variety of industries including not-for-profits, utilities, financial services, construction, sales, health care, and retirement plans. Preparation of Federal and State income tax returns for individuals, corporations, partnerships, and trusts. Proficient with software and technology. EDUCATION Ms. Austin earned a Bachelor of Business in Accountancy degree from Western Illinois University in Macomb, Illinois. } Ellin & Tucker, Chartered | | EST CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS BALTIMORE . WASHINGTON FREDERICK BELCAMP ‘SUITE 1300 SUITE 250 SUITE 105 SUITE 302 100 SOUTH CHARLES STREET 655 FIFTEENTH STREET,NW . 30 WEST PATRICK STREET 4692 MILLENNIUM DRIVE BALTIMORE, MD 21201-2714 WASHINGTON, DC 20005-5701 FREDERICK, MD 21701-5589 BELCAMP, MD 21017-1535 410-727-5735 © 202-638-0902 301-696-1926 410-272-1680 FAX: 410-727-1405 FAX: 202-638-4311 FAX: 301-696-1933 FAX: 410-272-4290 www.etnet.com SYSTEM REVIEW REPORT To the Shareholders of Swalling & Associates, P.C. and the National Peer Review Committee We have reviewed the system of quality control for the accounting and auditing practice of Swalling & Associates, P.C. (Firm) in effect for the year ended May 31, 2011. Our peer review was conducted in accordance with Standards for Performing and Reporting on Peer Reviews established by the Peer Review Board of the American Institute of Certified Public Accountants. The Firm is responsible for designing a system of quality control and complying with it to provide the Firm reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Our responsibility is to express an opinion on the design of the system of quality control and the Firm's compliance therewith based on our review. The nature, objectives, scope, limitations of, and the procedures performed in a system review are described in the standards at www.aicpa.org/prsummary. As required by the standards, engagements selected for review included an audit of an employee benefit plan. In our opinion, the system of quality control for the accounting and auditing practice of Swalling & Associates, P.C. in effect for the year ended May 31, 2011 has been suitably designed and complied with to provide the Firm with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Firms can receive a rating of pass, pass with deficiency(ies) or fail. Swalling & Associates, P.C. has received a peer review rating of pass. ELLIN & TUCKER, CHARTERED Certified Public Accountants Baltimore, Maryland November 28, 2011 MOEPEMDENT ELSES OF HAM S3iNnNG WORLD SINCE 1946 ° PROVIDING QUALITY SERVICES IN 4 DECLARATIONS ACCOUNTANTS PROFESSIONAL LIABILITY POLICY PRODUCER BRANCH PREFIX POLICY NUMBER INSURANCE IS PROVIDED BY CONTINENTAL CASUALTY COMPANY 003613 = 970 = APL 188208940 CNA PLAZA, CHICAGO, IL 60685 A STOCK INSURANCE COMPANY REFERRED TO AS WE, US, OR OUR. 1. Named Insured and Mailing Address * * *NOTICE* * * * Swalling & Associates, PC THIS IS A CLAIMS-MADE POLICY AND COVERS 3301 C Street, Suite: 405 ONLY CLAIMS FIRST MADE AGAINST THE INSURED Anchorage, AK 99503 DURING THE POLICY PERIOD. PLEASE READ THIS POLICY CAREFULLY AND DISCUSS THE COVERAGE WITH YOUR INSURANCE AGENT. 2. POLICY PERIOD: FROM: 12/01/11 TO: 12/01/12 at 12:01 A.M. Standard time at your address shown above. 3. PRIOR ACTS DATE: NO PRIOR ACTS DATE LIMITATION APPLIES 4. $10,000 PROFESSIONAL LIABILITY PER CLAIM DEDUCTIBLE 5. LIMITS OF LIABILITY: (INCLUDES CLAIM EXPENSES UNLESS AMENDED BY ENDORSEMENT) $1,000,000 PERCLAIM $2,000,000 AGGREGATE 6. FOR NON-RENEWAL : 45 days notice will be given you in accordance with policy conditions. 7. PRINTED ENDORSEMENTS ATTACHED AT POLICY ISSUANCE INCLUDE: G-127136-A(1/08) Policy G-127139-A Excl Named Individuals or Entities G-127137-A(5/00) Declarations Page G-127157-A(6/97) Nuclear Energy & Pollution Excl. G-127164-A54(6/00) Amend. Termination Provisions - AK G-127165-A54(7/97) Amend. Endorsement-Other Ins.-AK G-127173-A54(6/00) Amend. Endorsement - AK G-141584-A (6/03) Policyholder Notice GSL2656XX(5/08) Network Risk & Privacy Claim G-127152-AC(5/06) Claim Expenses Outside Limits G-127170-A54(7/97) AK Attorneys Fees-Cov. Notice A G-127137-A (Ed.5/00)