2009 Audit Management Letter - Laserfiche WebLink

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City of Centerville May 19, 2010 Page 6 2008-2 Preparation of Financial Statements Condition: As in prior years, we were requested to draft the audited financial statements and related footnote disclosures as part of our regular audit services.Recent auditing standards require auditors to communicate this situation to the Council as an internal control deficiency. Ultimately, it is management’s responsibility to provide for the preparation of your statements and footnotes, and the responsibility of the auditor to determine the fairness of presentation of those statements.It is our responsibility to inform you that this deficiency could result in a material misstatement to the financial statements that could have been prevented or detected by your management.Essentially, the auditors cannot be part of your internal control process. Criteria: Internal controls should be in place to provide reasonable assurance over financial reporting. Current Year Status: No change from prior year. See above finding 2009-2 Planned Scope and Timing of the Audit We performed the audit according to the planned scope and timing previously communicated to you. Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies.The significant accounting policies used by the City are described in Note 1 to the financial statements.The requirements of GASB statement No. 45 were adopted for the year ended December 31, 2009.We noted no transaction entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumption about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected.The mostsensitive estimates affecting the financial statements were capital asset basis, depreciation, and other postemployment benefits payable. Management’s estimate of depreciation is based on estimated useful lives of the assets. The estimate of historical cost is based on engineers’ estimates and deflated current value.Management’s estimate of its OPEB liability is based on several factors including, but not limited to, anticipated retirement age for active employees, life expectancy, turnover, and healthcare cost trend rate.We evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relationto the financial statements taken as a whole. The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit.