Agmt20 Hinderliter, de Llamas & Associates

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DocuSign Envelope ID: 1 C1 16E52-C95A-49D7-ABDF-F666336A629D EXHIBIT "A" SCOPE OF SERVICES AND FEE Objective 1: Conduct Financial Audits Consultant will conduct one annual financial audit of each permitted cannabis business to verify the accuracy of the revenue reported to the City during the review period and will recommend a tax assessment should the audit reveal any unreported revenue. As part of the process, Consultant will conduct a risk based analytical review of the business using the proprietary Cannabis Analytical Tracking Solution (CATST') program to ensure there is no diversion of product or cash. Consultant's unique audit approach allows it to identify if a cannabis operator is underreporting its taxes or diverting product from its facility. Consultant's audit staff will also use information gathered as part of any onsite inspections to assist with the financial audit. Consultant will help the City prepare a notification letter to send to the business to start the audit. The letter will contain pertinent information about the audit, including a list of the records requested and a request for access to the business' point of sale system. Consultant recommends the notification letter be sent by the City to encourage cooperation from the business and communicate Consultant's authority to conduct the audit. The audit shall include: • Field visit • Gross receipts verification • Risk based CATST"' Analytic Review • Inventory review (subject to access to the track and trace system) • POS data entry requirements review • Preparation and issuance of report • Exit conference with the City Consultant will provide a draft audit report to the cannabis business. The business will be given appropriate time to respond or appeal the report in accordance with the City ordinance. Consultant will review any documentation provided by the business to dispute the findings and will adjust the tax assessment appropriately prior to issuing the final report to the City. Objective 2: Conduct Two Regulatory Compliance Inspections Per Year Consultant will conduct two (2) on-site compliance inspections annually for each permitted cannabis business to determine compliance with State and local laws. If Consultant identifies any noncompliant activities, Consultant will provide the City with a recommended appropriate action to address the deficiency and to ensure future compliance by the permittee. The cost for this service includes all of the following: • Notifying permittee of pending inspection • 2 -hour on-site inspection to ensure that each business complies with all State and local laws and regulatory protocols for all of the following: REV: 07-06-2020 MI ATTY/AGR.2020.116/Hinderliter, de Llamas & Associates (HdL) (Page 11 of 15)