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11.09.27 Management Letter

11.09.27 Management Letter

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Published by: dmcintosh853 on Sep 28, 2011
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09/28/2011

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CITYOFLOWELL,MASSACHUSETTSMANAGEMENTLETTERJUNE30,2010
 
Powers
&
Sullivan
CerzlJiedPublicAccountants
100QpannapowirrParkwaySuite101Wakefield,MA01880
T
781-914-1700F781-914-1701www.powersandsullivan.com
Inplanningandperformingourauditofthefinancialstatementsofthegovernmentalactivities,thebusiness-typeactivities,eachmajorfund,andtheaggregateremainingfundinformationoftheCityoflowellasofandforthefiscalyearendedJune30,2010,inaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica,weconsideredtheCity'sinternalcontroloverfinancialreporting(internalcontrol)asabasisfordesigningourauditingproceduresforthepurposeofexpressingouropinionsonthefinancialstatements,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCity's'internalcontrol,Accordingly,wedonotexpressanopinionontheeffectivenessoftheCityofLowell'sinternalcontrol.TotheHonorableMayorandCityCouncilCityofLowell,MassachusettsOurconsiderationofinternalcontrolwasforthelimitedpurposedescribedintheprecedingparagraphandwasnotdesignedtoidentifyalldeficienciesininternalcontrolthatmightbesignificantdeficienciesormaterialweaknessesand,therefore,therecanbenoassurancethatallsuchdeficiencieshavebeenidentified.However,asdiscussedbelow,weidentifiedadeficiencyininternalcontrolthatweconsidertobeamaterialweakness.Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallowmanagementoremployees,inthenormalcourseofperformingtheirassignedfunctions,topreventordetectandcorrectmisstatementsonatimelybasis.Amaterialweaknessisadeficiency,oracombinationofdeficienciesininternalcontrol,suchthatthereisareasonablepossibilitythatamaterialmisstatementoftheentity'sfinancialstatementswillnotbeprevented,ordetectedandcorrectedonatimelybasis.WeconsiderthefollowingdeficiencyintheCityofLowell'sinternalcontroltobeamaterialweakness.Wenotedthatreconciliationproceduresoversignificantcashaccountswereinadequateorwerenotperformedduringfiscalyear2010.Wealsobecameawareofseveralmattersthatareopportunitiesforstrengtheninginternalcontrolsandenhancingoperatingefficiency.Thememorandumthataccompaniesthislettersummarizesourcommentsandsuggestionsconcerningthosematters.ThiscommunicationisintendedsolelyfortheinformationanduseofmanagementoftheCityofLowell,Massachusettsandotherswithintheorganization,andisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.TheCityoflowell'swrittenresponsestothematerialweaknessesandothermattersidentifiedinouraudithavenotbeensubjectedtotheauditproceduresappliedintheauditofthefinancialstatementsand,accordingly,weexpressnoopiniononthem.
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November30,2010
 
CITYOFLOWELL,MA$$ACHUSeITSMANAGEMENTLETTERJUNE30,2010TABLEOFCONTE.NTSPAGEMaterialWeakness
1
MaterialWeaknessinInternalControlsOverCash2
PriorYearComments
4Treasurer/Collector'sOffice-OldOutstandingChecks5IndividualFundReconciliations5FixedAssets6FraudR.iskAssessment.____.6ControlOverLong-TermDebt7InternalAuditFunction7OldOutstandingReceivables_8DepositandInvestmentPoficy____.__8PoliceDetailReceivables8FederalGrantExpenditures____9OtherPost-EmploymentBenefitActuarial9TreasuryCashReconciliationPosition"10ReviewFunctionsofBankAccounts10
CurrentYearComments
11RetirementCashAccountReconciliation12GavernrnentAccountingStandardsBoard(GASB)Statement#54_12

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