2004-05-28
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SEDORE & COMPANY
PO Box 918
62 East Main Street
Certified Public Accountants, pc.
Wappingers Falls, NY 12590
teI845.297.1111
fax 845.297.1432
Poughkeepsie 845.485.5510
BeMon 845.831.0542
www.sedoreco.com
May 28, 2004
james L. Sedore, jr., CPA
Mark S. O'SUflithlll, CPA
Joseph Ruggerio, Supervisor
Town of Wappinger
20 Middlebush Road
Wappingers Falls, N.Y. 12590
james F Lellerio, jr" CPA
Linda M. Hannig'1!/, CPA
Karen T Hlrlsfn, CPA
We are pleased to confirm our understanding of the services we are to provide the Town of
Wappinger for the year ended December 31,2003. We will audit the financial statements of The
Town of Wappinger as of and for the year ended December 31, 2003 . We understand that the
financial statements will be presented in accordance with the financial reporting model in
accordance with that described in GASB Statement No. 34. Also, the document we submit to
you will include the following additional information that will be subjected to the auditing
procedures applied in our audit of the financial statements.
1. Required Supplemental Information - Management's Discussion and Analysis
Audit Objectives
The objective of our audit is the expression of an opinion as to whether your financial statements
are fairly presented, in all material respects, in conformity with accounting principles generally
accepted in the United States of America. Our audit will be conducted in accordance with United
States of America generally accepted auditing standards and the standards for financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United
States, and will include tests of the accounting records of the Town of Wappinger and other
procedures we consider necessary to enable us to express such an opinion. If our opinion on the
financial statements is other than unqualified, we will fully discuss the reasons with you in
advance. If, for any reason, we are unable to complete the audit or are unable to form or have not
formed an opinion, we may decline to express an opinion or to issue a report as a result of this
engagement.
We will also provide reports (that do not include opinions) on internal control related to the
financial statements and compliance with laws, regulations, and the provisions or grant
agreements, noncompliance with which could have a material effect on the financial statements as
required hy (;nvernment Auditing Standard..
Large Firm Expertise"" Local Firm Service
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Management Responsibilities
Management is responsible for establishing and maintaining internal control and for compliance
with laws, regulations, contracts, and agreements. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs of the
controls. The objectives of internal control are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition,
that transactions are executed in accordance with management's authorizations and recorded
properly to permit the preparation of financial statements in accordance with generally accepted
accounting principles.
Management is responsible for making all financial records and related information available to us.
We understand that you will provide us with such information required for our audit and that you
are responsible for the accuracy and completeness of that information. We will advise you about
appropriate accounting principles and their application and will assist in the preparation of your
financial statements, but the responsibility for the financial statements remains with you. That
responsibility includes the establishment and maintenance of adequate records and effective
internal control over financial reporting, the selection and application of accounting principles,
and the safeguarding of assets. Management is responsible for adjusting the financial statements
to correct material misstatements and for confirming to us in the representation letter that the
effects of any uncorrected misstatements aggregated by us during the current engagement and
pertaining to the latest period presented are immaterial, both individually and in the aggregate, to
the financial statements taken as a whole.
You are responsible for the design and implementation of programs and controls to prevent and
detect fraud, and for informing us about all known or suspected fraud affecting the government
involving (a) management, (b) employees who have significant roles in internal control, and (c)
others where the fraud could have a material effect on the financial statements. You are also
responsible for informing us of your knowledge of any allegations of fraud or suspected fraud
affecting the government received in communications from employees, former employees,
regulators, or others. In addition, you are responsible for identifying and ensuring that the entity
complies with applicable laws and regulations.
Audit Procedures - General
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, therefore, our audit will involve judgment about the number of
transactions to be examined and the areas to be tested. We will plan and perform the audit to
obtain reasonable rather than absolute assurance about whether the financial statements are free of
material misstatement, whether from errors, fraudulent financial reporting, misappropriation of
assets, or violations of laws or governmental regulations that are attributable to the entity or to
acts by management or employees acting on behalf of the entity. Because an audit is designed to
provide reasonable, but not absolute assurance and because we will not perform a detailed
examination of all transactions, there is a risk that material misstatements may exist and not be
detected by us. In addition, an audit is not designed to detect immaterial misstatements or
violations of laws or governmental regulations that do not have a direct effect and material effect
on the financial statements. However, we will inform you of any material errors that come to our
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attention and we will inform you of any fraudulent financial reporting or misappropriation of
assets that comes to our attention. We will also inform you of any violations of laws or
governmental regulations that come to our attention, unless clearly inconsequential. Our
responsibility as auditors is limited to the period covered by our audit and does not extend to
matters that might arise during any later periods for which we are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded
in the accounts, and may include tests of the physical existence of inventories, and direct
confirmation of receivables and certain other assets and liabilities by correspondence with selected
individuals, creditors, and financial institutions. We will request written representations from your
attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the
conclusion of our audit, we will also require certain written representations from you about the
financial statements and related matters.
Identifying and ensuring that the Town of Wappinger complies with laws, regulations, contracts,
and agreements is the responsibility of management. As part of obtaining reasonable assurance
about whether the financial statements are free of material misstatement, we will perform tests of
the Town of Wappinger compliance with applicable laws and regulations and the provisions of
contracts and agreements. However, the objective of our audit will not be to provide an opinion
on overall compliance and we will not express such an opinion.
Audit Procedures - Internal Control
In planning and performing our audit, we will consider the internal control sufficient to plan the
audit in order to determine the nature, timing, and extent of our auditing procedures for the
expressing our opinion on The Town of Wappinger's financial statements.
We will obtain an understanding of the design of the relevant controls and whether they have been
placed in operation, and we will assess control risk. Tests of controls may be performed to test
the effectiveness of certain controls that we consider relevant to preventing and detecting errors
and fraud that are material to the financial statements and to preventing and detecting
misstatements resulting from illegal acts and other noncompliance matters that have a direct and
material effect on the financial statements. (Tests of controls are required only if control risk is
assessed below the maximum level.) Our tests, if performed, will be less in scope than would be
necessary to render an opinion on internal control and, accordingly, no opinion will be expressed.
An audit is not designed to provide assurance on internal control or to identify reportable
conditions. However, we will inform the Town Board or audit committee of any matters
involving internal control and its operation that we consider to be reportable conditions under
standards established by the American Institute of Certified Public Accountants. Reportable
conditions involve matters coming to our attention relating to significant deficiencies in the design
or operation of the internal control that, in our judgment, could adversely affect the Town's ability
to record, process, summarize, and report financial data consistent with the assertions of
management in the financial statements.
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Audit Administration, Fees and Other
We understand that your employees will prepare all cash or other confirmations we request and
will locate any invoices selected by us for testing.
The work-papers for this engagement are the property of Sedore & Company, C.P.A. 's P.C. and
constitute confidential information. However, we may be requested to make certain work-papers
available to the New York State Comptroller's Office pursuant to authority given to it by law or
regulation. Ifrequested, access to such work-papers will be provided under the supervision of
Sedore & Company, C.P.A.'s, P.C. personnel. Furthermore, upon request, we may provide
photocopies of selected work-papers to the New York State Comptroller's Office or other
regulatory authorities. Those regulatory authorities may intend, or decide, to distribute the
photocopies.
We expect to begin our audit our audit on approximately June 21, 2004 and to issue our report no
later than September 1, 2004.
Our fee for these services will be according to our proposal dated November 18, 1997 sent to you
under separate cover. Our invoices for these fees will be rendered each month as work
progresses and are payable on presentation. The above fee is based on anticipated cooperation
from your personnel and the assumption that unexpected circumstances will not be encountered
during the audit. If significant additional time is necessary, we will discuss it with you and arrive
at a new fee estimate before we incur the additional costs.
Government Auditing Standards require that we provide you with a copy of our most recent
quality control review report. Our December 31, 2000 peer review report accompanies this letter.
We appreciate the opportunity to be of service to the Town of Wappinger and believe this letter
accurately summarizes the significant terms of our engagement. If you have any questions, please
let us know. If you agree with the terms of our engagement as described in this letter, please sign
the enclosed copy and return it to us.
Very truly yours,
~ch u V t10rufj' C ,r: 4-:S
SEDORE & COMPANY, C.P.A.'s, P.C.
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RESPONSE:
This letter correctly sets forth the understanding of the Town of Wappinger, New York.
By:
Title:
Date:
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