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Barre MA: One Massive MATERIAL WEAKNESS

Barre MA: One Massive MATERIAL WEAKNESS

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Published by Craig Shibley
On February 27, 2013 the accounting firm Powers & Sullivan submitted the following management letter to the Town of Barre for FY'11 & FY'12.

P&S had been hired by the Town following a forensic audit which the Wakefield-based company completed in June '12. To date the results of that audit have not been released.

However, this management letter exposes a well-crafted lie perpetrated by Barre Inc.: That the forensic audit and eventual criminal investigation now in its 16-month was about questionable practices surrounding the Collector's Office.

No way! Never was the case.

"The material weakness in overall controls over operational and accounting processes highlighted that fact that
there was no documentation of the processes the former management had followed. We consider the lack of any
formal documentation of the system of internal controls over operational and accounting processes to be a
material weakness".
On February 27, 2013 the accounting firm Powers & Sullivan submitted the following management letter to the Town of Barre for FY'11 & FY'12.

P&S had been hired by the Town following a forensic audit which the Wakefield-based company completed in June '12. To date the results of that audit have not been released.

However, this management letter exposes a well-crafted lie perpetrated by Barre Inc.: That the forensic audit and eventual criminal investigation now in its 16-month was about questionable practices surrounding the Collector's Office.

No way! Never was the case.

"The material weakness in overall controls over operational and accounting processes highlighted that fact that
there was no documentation of the processes the former management had followed. We consider the lack of any
formal documentation of the system of internal controls over operational and accounting processes to be a
material weakness".

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Published by: Craig Shibley on Oct 11, 2013
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10/15/2013

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 TOWN OF BARRE, MASSACHUSETTSMANAGEMENT LETTERJUNE 30, 2011 and 2012
 
 
To the Honorable Board of SelectmenTown of Barre, MassachusettsIn planning and performing our audit of the financial statements of the governmental activities, the business-typeactivities, each major fund, and the aggregate remaining fund information of the Town of Barre as of and for thefiscal years ended June 30, 2011 and 2012, in accordance with auditing standards generally accepted in theUnited States of America, we considered Barre’s internal control over financial reporting (internal control) as abasis for designing our auditing procedures for the purpose of expressing our opinions on the financialstatements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control.Our consideration of internal control was for the limited purpose described in the preceding paragraph and wasnot designed to identify all deficiencies in internal control that might be significant deficiencies or materialweaknesses and, therefore, there can be no assurance that all such deficiencies have been identified. However,as discussed below, we identified certain deficiencies in internal control that we consider to be materialweaknesses. A control deficiency exists when the design or operation of a control does not allow management or employees, inthe normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. Asignificant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects theentity’s ability to initiate, authorize, record, process, or report financial data reliably in accordance with generallyaccepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity’sfinancial statements that is more than inconsequential will not be prevented or detected by the entity’s internalcontrol. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more thana remote likelihood that a material misstatement of the financial statements will not be prevented or detected bythe entity’s internal control. We have identified these findings in the material weakness section of this report.In addition, we became aware of other matters that are opportunities for strengthening internal controls andoperating efficiency. The memorandum that accompanies this letter summarizes our comments and suggestionsconcerning those matters.This communication is intended solely for the information and use of management of the Town of Barre,Massachusetts, and is not intended to be and should not be used by anyone other than these specified parties.February 27, 2013
 
 
TOWN OF BARRE, MASSACHUSETTSMANAGEMENT LETTERJUNE 30, 2012
 TABLE OF CONTENTSPAGE
Material Weakness
....................................................................................................................................... 1
 
Internal Control Risk of Errors Occurring Due to Competency of Management ......................................2
 
Document Significant Operational and Accounting Processes ................................................................3
 
Current Year Comments
.............................................................................................................................5
 
 Ambulance Receivable and Write off of Related User Charges ..............................................................6
 
Budgeted Estimated Revenues and Other Financing Sources ................................................................6
 
Purchase Order System ........................................................................................................................... 7
 
Other Postemployment Benefits Actuarial Valuation ............................................................................ 7
 
 Adopt a Cash and Investment Policy ....................................................................................................... 8
 
Fraud Risk Assessment ............................................................................................................................8
 
Develop Written Disaster Recovery Procedures ....................................................................................10
 
Future Government Accounting Standards Board (GASB) Statements for Pensions and OPEB .........10
 

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