Township of ChatsworthR.R. # 1

Chatsworth Ontario NOH 1G0

May 6, 2015

BDO Canada LLPChartered Accountants1717 Znd Ave East, 3rd FloorPO Box 397Oven Sound, Ontario N4K 5P7

Dear Sir/Madam:

This representation letter is provided in connection with your audit of the consolidated statement offinancial position as at December 31 , 2014, and the consolidated statements of operations andaccumutated surptus, net financiat assets and cash flows for the year then ended of the Township ofChatsworth for the purpose of expressing an opinion as to whether the consotidated financialstatements present fairty, in atl material respects, the financial position as at December 31 , 2014 andthe results of operations and cash flows for the year then ended of the Township of Chatsworth inaccordance with Canadian public sector accounting standards.

Financial Statements

1. We have futfitted our responsibitities, as set out in the terms of the audit engagement datedNovember 26, 2013, for the preparation of the consolidated financial statements in accordancewith Canadian pubtic sector accounting standards; in particutar the consotidated financialstatements are fairly presented in accordance therewith.2. Significant assumptions used by us in makng accounting estimates, including those measured atfair vatue are reasonable.

3. Retated party relationships and transactions have been appropriately accounted for and disclosedin accordance with the requirements of Canadian public sector accounting standards.

4. A[[ events subsequent to the date of the consotidated financial statements and for which Canadianpubtic sector accounting standards require adjustment or disclosure have been adjusted ordisclosed.

5. The consolidated financial statements of the municipality use appropriate accounting poticies thathave been property disclosed and consistentty apptied.

lnformation Provided

6. We have provided you with:- access to al[ information of which we are aware that is retevant to the preparation of the

consolidated financial statements, such as records, documentation and other matters;

- additiona[ information that you have requested from us for the purpose of the audit; and- unrestricted access to persons within the entity from whom you determined it necessary to

obtain audit evidence.

7. We are responsibte for the design, implementation and maintenance of internal controls toprevent, detect and correct fraud and error, and have communicated to you all deficiencies ininternal controt of which we are aware.

8. The minute books of the municipality are a complete record of atl meetings and resotutions ofCouncil throughout the year and to the present date.

9. We have disclosed to you atl significant matters contained in the minutes of all meetings andresolutions of Council throughout the year and to the present date.

10. At[ transactions have been recorded in the accounting records and are reftected in theconsotidated fi nanciaI statements.

11. We have disctosed to you atl known instances of non-comptiance or suspected non-comptiancewith laws and regutations whose effects should be considered when preparing consolidatedfinanciaI statements.

'12. We have identified to you:

- guarantees;

- indemnifications against damages, liabilities, costs, charges or expenses suffered or incurred byofficers or directors as a resutt of their service, and/or by any subsidiaries; and

- non-monetary transactions and transactions for no consideration.

13. We have disctosed to you the identity of the entity's related parties and the retated partyrelationships and transactions of which we are aware.

14. We are aware of the environmental laws and regulations that impact our municipatity and we arein comptiance. There are no known environmental tiabitities or contingencies that have not beenaccrued for or disctosed in the consolidated financial statements.

Fraud and Error

15. We have disctosed to you the results of our assessment of the risk that the consolidated financialstatements may be materiatly misstated as a resutt of fraud, and have determined such risk to beIow.

16. We have disclosed to you al[ information in retation to fraud or suspected fraud that we are awareof and that affects the entity and involves:

- management;

- emptoyees who have significant roles in internal controt; or

- others where the fraud coutd have a material effect on the consotidated financiat statements.

17. We have disclosed to you atl information in relation to altegations of fraud, or suspected fraud,affecting the entity's consolidated financiat statements communicated by employees, formeremptoyees, anatysts, regulators, or others.

18. We have reviewed and approved all journal entries recommended by the auditors during theaudit.

19. The effects of unadjusted misstatements are immaterial, both individuatty and in the aggregate,to the consotidated financial statements taken as a whote. A tist of the uncorrected misstatementsis attached to the representation letter.

Existence, Completeness and Valuation of Specific Financial Statement Balances

20. A[[ assets, wherever located, to which the municipatity had satisfactory title at the year-end, havebeen fairty stated and recorded in the consolidated financial statements. There are no tiens orencumbrances on the municipality's assets.

21. Al[ financial instruments have been appropriatety recognized and measured in accordance withCanadian pubtic sector accounting standards. Significant assumptions used in arriving at fair vatueof financiat instruments are reasonabte and appropriate in the circumstances.

22. Where the value of any asset has been impaired, an appropriate provision has been made in theconsotidated financial statements or has otherwise been disctosed to you.

23. The inventories as set out in the consotidated financial statements represent alt of the inventoriesto which the municipatity hetd title as at the batance sheet date. lnventories do not include anygoods consigned to the municipality, merchandise bitted to customers or any items for which thetiabitity has not been provided in the books. Appropriate provisions have been made for obsolete,slow-moving and defective inventories.

24. The employee future benefit costs, assets and obligation have been determined, accounted forand disclosed in accordance with Canadian public sector accounting standards. The source dataand plan provisions provided are complete and accurate. The ptans included in the valuation arecomptete. The determination of the discount rate and the use of specific actuarial assumptionsare our best estimate assumptions. We feel that the extrapotations are accurate and haveproperly reflected the effects of changes and events occurring subsequent to the most recentvatuation that had a material effect on the extrapolation.

General Representations

25. The nature of att material uncertainties have been appropriatety measured and disctosed in theconsolidated financial statements, inctuding all estimates where it is reasonably possibte that theestimate witl change in the near term and the effect of the change coutd be material to theconsolidated financial statements.

2. There were no direct contingencies or provisions (including those associated with guarantees orindemnification provisions), unusual contractuat obligations nor any substantial commitments,whether oral or written, other than in the ordinary course of business, which woutd materiallyaffect the consolidated financial statements or financial position of the municipatity, except asdisclosed in the consolidated financia[ statements.

27. We have informed you of atl outstanding and possible claims, whether or not they have beendiscussed with tegat counse[. When applicable, these claims have been appropriately disctosed inthe consotidated financial statements.

28. We confirm that there are no derivatives or off-batance sheet financial instruments held at year-end that have not been properly recorded or disclosed in the consolidated financial statements.

29. We have disctosed to you alt significant customers and/or suppliers of the municipality whoindividuatty represent a significant votume of business with the municipality. We are of theopinion that the volume of business (sates, services, purchases, borrowing and lending) done bythe municipatity with any one party is not of sufficient magnitude that discontinuance would havea materiat negative effect on the ongoing operations of the municipatity.

30. There have been no plans or intentions that may materiatly affect the carrying value orctassification of assets and tiabitities.

31. No significant matters, other than those disclosed in the consolidated financial statements, havearisen that woutd require a restatement of the comparative consotidated financial statements.

Yours truly,

Signature

4

IBDO Tet: 519 376 6110Fax 519 376 4741www,bdo.ca BDO Canada LLP1717 Znd Avenue E, Third FloorPO Box 397Owen Sound 0N N4K 5P7 Canada

APPENDIX EBDO Publications