2019-04-24 CC Packet - Laserfiche WebLink

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I. Internal Control Deficiencies Segregation of Duties: Our consideration of internal control disclosed that North Metro Telecommunications Commission has an inherent deficiency associated with the size of its accounting function that we consider to be a significant deficiency. The size of the Commission is such that optimum internal control achieved through adequate segregation of incompatible duties among accounting personnel is not feasible. Although the Commission has implemented policies and procedures to mitigate for the lack of segregation of duties, the Organization does not meet the criteria(as pronounced by the American Institute of Certified Public Accountants) for segregation of duties in its accounting function. As such, management and the Board of Commissioners should maintain sufficient oversight to avoid errors and irregularities. This situation is common to organizations of this size and any changes should be reviewed from a cost-benefit perspective. Financial Reporting Process: Our consideration of internal control disclosed that North Metro Telecommunications Commission has a significant deficiency associated with the financial reporting process. Management is responsible for establishing and maintaining internal controls and for the fair presentation of the financial statements and disclosures, in conformity with U.S. generally accepted accounting principles (GAAP). Like many similarly sized organizations, management has requested assistance from us, the auditors, with drafting financial statements and related notes. The outsourcing of these services is not unusual in organizations of this size and is a result of management's cost-benefit decision to rely on our accounting expertise rather than incurring this internal resource cost. This increases the possibility that errors and irregularities may not be detected on a timely basis. Management Response: Management is aware of these situations, but a cost-benefit analysis of the issues does not currently support the allocation of additional employees or resources at this time. Certain other safeguards are currently maintained (management oversight and review of draft financial statements) which provide satisfactory mitigation of the issues. The Commission's response to the significant deficiencies identified in our audit has not been subjected to the audit procedures applied in our audit of the financial statements and, accordingly, we express no opinion on it. II. Required Communications We have audited the financial statements of North Metro Telecommunications Commission for the year ended December 31, 2018, and have issued our report thereon dated March 22, 2019. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated January 14, 2019. Professional standards also require that we communicate to you the following information related to our audit. 3 178