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HomeMy WebLinkAboutCommunication with those charged with Governance Fishers Island Fire District COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE December 31, 2008 COMPANY A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS May 3, 2009 To the Board of Fire Commissioners Fishers Island Fire District We have audited the Annual Financial Report Update Document of Fishers Island Fire District (the District) for the year ended December 31, 2008, and have issued our report thereon dated May 3, 2009. Professional standards require that we provide you with the following information related to our audit. Our Responsibility Under U.S. Generally Accepted Auditing Standards and Government Auditing Standards As stated in our engagement letter dated December 8, 2008, our responsibility, as described by professional standards, is to express opinions about whether the Annual Financial Report Update Document prepared by management with your oversight is fairly presented, in all material respects, in conformity with the cash regulatory basis of accounting as prescribed by the New York State Comptroller's office. Our audit of the Annual Financial Report Update Document does not relieve you or management of your responsibilities. Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you in our meeting about planning matters in December 2008. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant polices used by the District are described in Note 1 to the Annual Financial Report Update Document. No new accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2008. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the Annual Financial Report Update Document in a different period than when the transaction occurred. An Independent Member of the BDO Seidman Alliance To the Board of Fire Commissioners Fishers Island Fire District May 3, 2009 Page 2 Accounting estimates are an integral part of the Annual Financial Report Update Document prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the Annual Financial Report Update Document and because of the possibility that future events affecting them may differ significantly from those expected. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial and communicate them to the appropriate level of management. Management has corrected ali such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the Annual Financial Report Update Document taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the Annual Financial Report Update Document or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated May 3, 2009. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Annual Financial Report Update Document or a determination of the type of auditor's opinion that may be expressed on the Annual Financial Report Update Document, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. To the Board of Fire Commissioners Fishers Island Fire District May 3, 2009 Page 3 Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. OTHER MATTERS Bank Reconciliations During our audit, we noted, the District was not always reconciling the bank accounts as of the end of the month, rather the reconciliation dates were at various points throughout the month. We would like to remind the District that the reconciliations should be done as of the date of the bank statement, as this will assist in identifying any errors made during the month. Budgets While reviewing the budget prepared by the District for the 2009 fiscal year, we noted that the budget submitted to the Town of Southold lacked the required disclosure of the 2009 statutory spending margin. We would be glad to assist the District in calculating this amount going forward in order to bring the budgets into compliance with New York State requirements. Purchasing Policy Amendments We would like to remind the District that New York State's Chapter 402 of the laws of 2007, which is effective January 1, 2009, requires municipalities to update their municipal purchasing policies (required under Section 104 of the New York State General Municipal Law) to include the names and titles of those municipal officials responsible for purchasing decisions. New Annual Financial Report Update Document Requirements In light of new required disclosures of energy consumption in the Annual Financial Report Update Document, we recommend the District begin compiling this information on an ongoing basis as this will ease the burden of obtaining this information at the year end. If you should require assistance in developing a method to track these costs and usages, we will be glad to assist you. ~CO~ANY To the Board of Fire Commissioners Fishers Island Fire District May 3, 2009 Page 4 Procurement Policy During our discussions with you, we have learned that during the year ended December 31, 2008, the District did not have a written procurement policy. We are pleased to note that based on these discussions the District has subsequently adopted such a policy effective for the year ended December 31, 2009. Investment Policy During our discussions with you, we have learned that during the year ended December 31, 2008, the District did not have a written investment policy. We are pleased to note that based on these discussions that the District has subsequently adopted such a policy effective for the year ended December 31, 2009. We wish to express our appreciation for the courtesies extended to our staff during the audit, and we would be pleased to discuss our comments and recommendations with the Board of Fire Commissioners. Sheehan & Company, C.P.A., P.C. ~COMPANY