2003-05-22
~
Sedore & Company
Certified Public Accountants, Pc.
POIlp:hkeepJie
(845) 485-55/0
Jomer L. Sedore, Jl:, CP.A.
Mork S. 0 'SlIllivOll, CP.A.
JomeJ F. Letterio, .It:, CP.A.
'Rmo A. Bomlti, CP.A.
Lilldo M HOll11ir;on, CP.A.
Koren T. Honsen. CP.A.
p.G. Box 918 . 62 East Main Street. JI1Jppingers Falls, NY 12590
(845) 297-1111 . Fax (845) 297-1432
www.sedoreandcompany.com
Beocon
(845) 831-0542
Newbllrr;1t
(845) .56.5-/373
May 22, 2003
Joseph Ruggerio, Supervisor
Town of Wappinger
20 Middlebush Road
Wappingers Falls, N.Y. 12590
We are pleased to confirm our understanding of the services we are to provide the Town of
Wappinger for the year ended December 31, 2002 . We will audit the financial statements of The
Town of Wappinger as of and for the year ended December 31, 2002 . We understand that the
financial statements will be presented in accordance with the financial reporting model in effect
prior to that described in GASB Statement No. 34.
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 by Government Auditing Standards.
1
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
2
on the financial statements. However, we will inform you of any material errors that come to our
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.
3
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 2, 2003 and to issue our report no
later than August 1, 2003.
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,
~{LU ~. (1V7U/?'&CJ (! t/~ fl > 75
SEDORE & COMPANY, C.P.A.'s, P.C.
By:
4
RESPONSE:
This letter correctly sets forth the understanding of the Town of Wappinger, New York.
BYrJh,(~
Title: ~..~
Date: 0/31 )~3
5
Russell Pugh CPA) PC
Cllrtltlcd Publi~ Accountsllrc
).lOlt officI;: DOli: aU7
Central Valley, New York 10917
-
Ted: (845) 928-9120
Fm (8"'S) 9111.lO39
April 18. ZOOl
To: Sedore & Company
Certified Publio Accountants, P.C.
I have reviewed the system ot quality oontrol for the
acoountin. and auditin. practioe of Sedore ~ Company
C~rtlfied Public Accountants, p,e. (the firm) in effect for
the year ended Deoember 31, 2000. A sys~ea of quality
control encompasse8 the fir.~8 organizational structure and
t.he polioies adopted and procedures establ isbed to provide it
with reasonable assuranee of oonforming with professional
- standards. The elements of quality control are desoribed in
the State.ents on Quality Control Standards issued by the
American Institute ot Certified Public Accountants (AICPA).
The design of the system a~d oomplianoe wit.h it are the
JloopoRoibil i t!r of tho finm _ Mlr raiilJlona i hi 1 i ty 11 t,n PTpr,.RR
an opinion on the design of the system, and the firm's
campi ;.d.rWo': W t th thA SYl!t~m---baAe!1-. eft..my - re...ie'-l.... .
My revie~ was oonduoted in aooordanoe with standards
e$tBb11shed by the Peer Review Board of the AICPA. In
performing my review, I obt.ained a.n understanding of' the
system of quality control for the firm's accountin~ and
F.1ud:it.1ng practice. In additior~, t tested compliance with the
firm's quality ~ontrol policies and procedures to the extent
I considered appropriate. These testa covered the
application of the firm's policies and prooedur~a on selected
engagements. Because my review was baeedon selective tests,
it would not necessarily disclose all weaknesses in the
system of quality oontrol or all instanoes of laok of
compliance with i~.
Because there are inherent limitations in the effeotiveness
of any system of quality control. depar~ures rrom ~ne sY8~em
may occur and not be deteoted. Also, projection of any
evaluation of a system of quality control to future periods
is 5ubject to the risk that the system of quality control may
become inadequate because of changea in conditions, or
be~auge the degree of compliance with the polioies or
procedures may de~eriora~e.
In my opinion, 'the system of quali ty cont.ro.l fo.,. th~
accounting and auditing practice of Sedore & C
ompany
Certified Public Accountants, P.C, in effect for the year
ended December ::41, 2000, has been designed to meet the
requirementR of the quality control standards for an
aooounting and auditing praotioe established by the AICPA and
was complied with durinl the year then ended to provide the
firm with reasonable a.Burance of oonformina with
professional standards.
~ g~ CPA~ f(-.
RU8sell Pugh CPA, PC
Russell Pugh CPA,PC