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HomeMy WebLinkAboutAudit - Justice Court Southold Town Board - Letter Board Meeting of August 14,2007 RESOLUTION 2007-684 ADOPTED Item # 13 DOC 10: 3108 THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO. 2007-684 WAS ADOPTED AT THE REGULAR MEETING OF THE SOUTHOLD TOWN BOARD ON AUGUST 14,2007: RESOLVED that the Town Board ofthe Town of South old hereby authorizes and directs Supervisor Scott A. Russell to execute an al!:reement with Albrecht. Vil!:l!:iano. Zureck and Co.. CPAs to conduct an audit ofthe Southold Town Justice Court as required by the New York State Office of Court Administration for the year ended December 31, 2006, in an amount not to exceed $5,000 and which shall be a legal charge to the General Fund Whole Town Independent Auditing and Accounting Budget (A. I 320.4.500.300), all in accordance with the approval of the Town Attorney. I'I1"J "".#Q.r;",;Jj~ Elizabeth A. Neville South old Town Clerk RESULT: ADOPTED [UNANIMOUS] MOVER: Albert Krupski Jr., Councilman SECONDER: William P. Edwards, Councilman AYES: Krupski Jr., Edwards, Ross, Wickham, Russell ABSTAIN: Louisa P. Evans Generated August 15,2007 Page 16 . CERTIFIED PUBLIC ACCOUNTANTS, BUSINESS ADVISORS AND CONSULTANTS 25 Suffolk Court, Hauppouge, New York 11788 631.434.9500 . Fax 631.434.9518 WWW.Qvz.com August 9, 2007 Mr. ScotiA. Russell, Town Supervisor Town of Southold Southold, New York 11971 Dear Mr. Russell: COPY, We are pleased to confirm our understanding of the services we are to provide the Town of Southold (the "Town") for the year ended December 31, 2006. We will aud~ the statement of cash receipts and disbursements of the Town of Southold Justice Court Fund for the year ended December 31, 2006. Our audit will be conducted in accordance with U.S. generally accepted auditing standards. The statement of cash receipts and disbursements will be prepared on the cash basis of accounting, which is comprehensive basis of accounting other then accounting principles generally accepted in the United States of America. Audit Objective The objective of our audit is the expression of an opinion as to whether the statement of cash receipts and disbursements is fairly presented, in all material respects, in conformity with the cash basis of accounting, which is comprehensive basis of accounting other then accounting principles generally accepted in the United States of America, Our audit will include tests of the accounting records and other procedures we consider necessary to enable us to express such an opinion as described above on the statement of cash receipts and disbursements. If our opinion on the statement of cash receipts and disbursements is other than unqualified, we will fully 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. Management Responsibilities Management is responsible for establishing and maintaining effective internal controls and for compliance with the provisions of applicable laws, regulations, contracts, agreements, and grants. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of the controls. The objectives of internal control are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorizations and recorded properly to permit the preparation of statement of cash receipts and disbursements in accordance with the cash basis of accounting. ALBRECHT, VIGGIANO, ZURECK & COMPANY, PC. INDEPENDENT MEMBER OF 8KR INTERNATIONAL Mr. Scott A. Russell, Town Supervisor Town of Southold Page 2 Management is responsible for making all financial records and related information available to us, including any significant vendor relationships in which the vendor has the responsibility for program compliance. We understand that you will provide us with such information required for our audit and that you are responsible for the accuracy and completeness of that information. Management's responsibilities include adjusting the statement of cash receipts and disbursements to correct material misstatements and for confirming to us in the 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 statement of cash receipts and disbursements taken as a whole. You are responsible for establishing and maintaining intemal controls, including monitoring ongoing activities; for the selection and application of accounting principles; and for the fair presentation in the statement of cash receipts and disbursements of the Town of Southold Justice Court Fund in conformity with the cash basis of accounting. 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 govemment 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 statement of cash receipts and disbursements. You are also responsible for informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, regulators, or others. As part of the audit, we will prepare a draft of your statement of cash receipts and disbursements, notes. In accordance with Government Auditing Standards, you will be required to review and approve the statement of cash receipts and disbursements prior to their issuance and have a responsibility to be in a position in fact and appearance to make an informed judgment on the statement of cash receipts and disbursements. Further, you are required to designate a qualified management-level individual to be responsible and accountable for overseeing our services. Audit Procedures-General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of cash receipts and disbursements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the statement of cash receipts and disbursements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or govemmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse, if applicable Because an audit is designed to provide reasonable, but not absolute, assurance 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. 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 statement of cash receipts and disbursements. However, we will inform you of any material errors that come to our attention, and we will inform you of any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform you of any violation 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 matters that might arise during any later periods for which we are not engaged as auditors. Mr. Scott A. Russell, Town Supervisor Town of Southold Page 3 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 other assets and liabilities by correspondence with selected individuals, creditors, and financial institutions. If applicable, 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 also require certain written representations from you about the statement of cash receipts and disbursements and related matters. Audit Procedures-Internal Control In planning and performing our audit, we will consider the internal control sufficient to plan the audit in order to determine the nature, timing, and extent of our auditing procedures for the purpose of expressing our opinion on the Town of Southold Justice Court Fund statement of cash receipts and disbursements. If the audit is subject to Government Auditing Standards: We will obtain an understanding of the design of the relevant controls and whether they have been placed in operation, and we will assess control risk. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the statement of cash receipts and disbursements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the statement of cash receipts and disbursements. Tests of controls relative to the statement of cash receipts and disbursements are required only if control risk is accessed below the maximum level. 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. An audit is not designed to provide assurance on internal control or to identify reportable conditions. However, we will inform the governing body or audit committee of any matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the statement of cash receipts and disbursements. We will also inform you of any non reportable conditions or other matters involving internal control, if any, as required by Govemment Auditing Standards. Audit Administration, Fees, and Other We understand that your employees will provide us with the basic information required for our audit including locating invoices selected by us for testing, various account analysis, and schedules needed to prepare the statement of cash receipts and disbursements. You are responsible for the accuracy and completeness of all information provided. We expect to begin our audit at a mutually agreeable date and to issue our report in a timely fashion after receipt of all information needed to prepare the statement of cash receipts and disbursements. Our fees for services are based on the number of hours required to complete our engagement and our current standard hourly rates which vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Based on our preliminary estimates, the fee range for this audit will be in between $3,500 and $5,000. Mr. Scott A. Russell, Town Supervisor Town of Southold Page 4 These fee estimates are 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. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with our firm policies, work may be suspended if your account becomes 30 days or more overdue and may not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed our report. You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs through the date of termination. The above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. Should additional time be incurred or additional assistance be requested, we will invoice you separately based upon the amount of time expended at the regular hourly rates in effect at the time the services are rendered. We appreciate the opportunity to be of service to the Town of Southold 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 retum it to us. Very truly yours, f/~ t/~)~t ~F.c:._ , . f / I ALBRECHT, VIGGIANO, ZURECK AND COMPANY, P. C. . . Mr. Scott A. Russell, Town Supervisor Town of Southold Page 5 RESPONSE: This letter correctly sets forth the understanding of the By: _z;=~ Stt?'C#7/ISO~ Title: Date: cl#!/a;