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New Hackensack 2012 - - - - - New Hackensack Fire District - Report to the Board of Commissioners - June 27, 2012 - - - - - - - - - - - - ~~~~~~~(Q) SEP 1 3 20i2 TOWN OF WAPPINGER TOWN CLERK - - - - - NEW HACKENSACK FIRE DISTRICT CONTENTS Page - Board Report Required Communications Summary of Recorded Audit Adjustments 2-3 4 - Exhibit A - Letter Communicating Control Deficiencies 5-8 - - Exhibit B - Certain Written Communications Between Management and Our Firm Arrangement Letter Management Representation Letter 9-12 13 - 18 - - - - - - - - - - - - - \.--*__~~CORE -~ DEBENEDICTUS 1'. . -..c.......- DIGOVANNI ~ WEDDELL - UMlTED l.IABILl1 Y PARTNERSHlP CER11FIED PUBLIC ACCOllNTANTS BUSINESS DEVELOPMDiT CONSIJLH.YrS - - - New Hackensack Fire District 217 Meyers Corners Road Wappingers Falls, NY 12590 Attention: Board of Commissioners - - We are pleased to present this report related to our audit of the financial statements of the New Hackensack Fire District ("the District") for the year ended December 31, 20 II. This report summarizes certain matters required by professional standards to be communicated to you in your oversight responsibility for New Hackensack Fire District's financial reporting process. - This report is intended solely for the information and use of the Board of Commissioners and management and is not intended to be and should not be used by anyone other than these specified parties. It will be our pleasure to respond to any questions you have regarding this report. We appreciate the opportunity to continue to be of service to New Hackensack Fire District. - Very truly yours, - VANACORE, DeBENEDICTUS, DiGOV ANNI & WEDDELL Limited Liability Partnership - ___"-..7'~" /") Iou ~'- tJ fir 6U?I t",~7A. ( /~ Tonia A. Crown, CPA, CITP Partner ~~(t;~~w~IT5) SEP 1 3 2012 - TOWN OF WAPPINGER TOWN CLERK - - - - II Ra.:quct Ru.J. P.o. !lux I()(~J<) Sc\\hurgh. NY 115~0 (X~5) 5(,7.')'01 rax (X~5) 567.<)11x hUJ' ,,\\\\\.JJ\\.CUI11 1611 Suulh AH'IlUC. I'.(). )lux <)5 WarJ'ingc" Fall.. NY 115<)0 ,x~~) <)05.<)O'~} rax 1~5) 905-'}<)II-I hilI': \\"". \.JJ\\.CUI11 5~0 \Vhilc Plain, RuaJ. SUlle 5'"' ranyt"'\ n. NY 1059 I (X~~) 5(,1-'JI"10 Fax (X4~) ~67.'n2l\ hIlJ':." \\ \I. \ JJ\\.CllI11 - - - New Hackensack Fire District Report to the Board of Commissioners June 27, 2012 - Required Communications - Auditing standards require the auditor to communicate certain matters to ensure those charged with governance are adequately informed about matters related to the financial statement audit that are, in our professional judgment, significant and relevant to the responsibilities of those charged with governance in overseeing the financial reporting process. The following summarizes these communications. - Auditor's Responsibilitv Under Professional Standards Our responsibility under auditing standards generally accepted in the United States of America has been described to you in our arrangement letter dated May 4, 2012. - Accountinl! Practices Adoption of, or Change in, Accounting Policies Management has the ultimate responsibility for the appropriateness of the accounting policies used by the District. The District did not adopt any significant new accounting policies nor have there been any changes in existing significant accounting policies during the current period. Significant or Unusual Transactions We did not identify any significant or unusual transactions or significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Alternative Treatments Discussed with Management We did not discuss with management any alternative treatments within accounting principles generally accepted in the United States of America for accounting policies and practices related to material items during the current audit period. - - - - Audit Adiustments Audit adjustments recorded by the District are shown on the attached "Summary of Recorded Audit Adjustments". - Uncorrected Misstatements There were no uncorrected misstatements identified as a result of our audit. - - Disal!reements with Manal!ement We encountered no disagreements with management over the application of significant accounting principles, the basis for management's judgments on any significant matters, the scope of the audit or significant disclosures to be included in the financial statements. - Consultations with Other Accountants We are not aware of any consultations management had with other accountants about accounting or auditing matters. - Sil!nificant Issues Discussed with Manal!ement No significant issues arising from the audit were discussed or were the subject of correspondence with management. - Difficulties Encountered in Performinl! the Audit We did not encounter any difficulties in dealing with management during the audit. - - 2 - - - New Hackensack Fire District Report to the Board of Commissioners June 27, 2012 - Letter Communicatinl! Control Deficiencies Attached as Exhibit A is a letter communicating the control deficiencies identified during our audit of the financial statements. - Certain Written Communications Between Manal!ement and Our Firm Copies of certain written communications between our firm and the management of the District are attached as Exhibit B. - - - - - - - - - - - - - - 3 - - - - - - - - New Hackensack Fire District Summary of Recorded Audit Adjustments Year Ended December 31,2011 - ... - - - - - - - - - - - New Hackensack Fire District - Summary of Recorded Audit Adjustments Year Ended December 31, 2011 - Name Account No Debit Credit A200 Cash:General Fund MM Bank Amer 6149 A.0200.04 GEN (579,365.00) A200 Cash:NKFO Gen Fund Operate 2460 A.0200.05 GEN 1,338,815.00 - A200 Cash:NKFO Payroll Account HSBC A0200.06 GEN (2,143.00) A200 Cash:Payroll Acct Bank of Amer 9805 A.0200.07 GEN 159,981.00 Year End Adjusting Account A.0200.08 GEN ( 14,544.00) - GF CO 2008 Account #6673 A.0200.09 GEN (500,000.00) GF C/O 2008 Account #3184 A0200.10 GEN (500,000.00) CD 2008 Acct # 6673 A.0200.11 GEN (576.00) - A201 Cash In Time Oeposits:General Fund CD A.0201.01 GEN 72,341.00 3900 Retained Earnings A.0911.02 GEN 753,414.00 NKFO Apparatus Res MT 3375 R.0200.01 RES (561,073.00) - Emerg Repair Res 3391 M & T R.0200.02 RES (20,900.00) Land Bldg Reserve 3383 M & T R.0200.03 RES (320,500.00) R230 Cash Special Reserves:Build Constr Res Ban R.0230.01 RES 294,622.00 - R230 Cash Special Reserves:NKFO Land/B1dg Cstr R.0230.02 RES (140,351.00) R231 Cash In Time Oep Spec Res:NKFO Apparatus R.023 1.0 I RES 381,073.00 R231 Cash In Time Oep Spec Res:NKFO Land/Build R.023 1.02 RES (361,859.00) - R882 Reserve For Repairs:Emerg Rep Res Bank R.0882.00 RES 1,065.00 To adjust unused cash accounts and fund balances @ 12/31/11 - A270 I Refund Prior Year Expenses A.2701.00 GEN 20,697.00 Insurance Recoveries A.2706.000 0 (45,755.00) A34101 Fire Personnel Service A34101.01 GEt-. 25,058.00 - A3410 I Fire Personnel Service A3410 1.0 I GEN A90408 Worker's Comp Empl BnfitVFBL Insurance A.90408.10 GEN - to reclass worker's compensation reimbursement for 207 A A341 0 I Fire Personnel Service A34101.01 GEt-. 20,930.00 A341 0 I Fire Personnel Service:FICA Expense Emp A.341O 1.03 GEt-. 483.00 - A341 0 I Fire Personnel Service:Secretary A.341 0 1.04 GE"t'. 1,000.00 A341 0 I Fire Personnel Service:Treasurer A.341O 1.05 GEt-. 2,549.00 A-400 Contract Employee State Withholding A.34104.82 GEN (7,555.00) - A-400 Contract Federal Witholding A.34104.83 GEN (17,407.00) To Gross up Payroll @ 12/31/11. - Prepaid retirement AI271.000 GEt-. 4,251.00 A90158 Retirement System A.90158.00 GEN ( 4,251.00) To adjust prepaid to 3 months of retirement contributions - Service Awards TA0013.001 TA 2.00 Service Award Program Assets T A.0461.000 T A (2.00) Adjust LOSAP balance - - 4 - - - - - - - - - Exhibit A - Letter Communicating Control Deficiencies - - - - - - - - - - - - - "'*'~~ Yv . _... VANACORE L1JIl-. .- . DEBENEDICTUS -.' ..c.....,. DIGOVANNI . ~ WEDDELL - - LlM[TED UABrU1Y PARTNERSHIP CERllHED PllBLlC ACCOUNTANTS BUSINESS DEVELOPME~T CONSULTAyrS - June 27, 2012 - New Hackensack Fire District 217 Meyers Corners Road Wappingers Falls, NY 12590 - - In planning and performing our audit of the financial statements of the New Hackensack Fire District as of and for the year ended December 31, 2011, in accordance with auditing standards generally accepted in the United States of America ("US GAAS"), we considered the District's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing an opinion on the District's financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control. - - Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be significant deficiencies or material weaknesses and, therefore, there can be no assurance that all deficiencies, significant deficiencies or material weaknesses have been identified. However, as discussed below, we identified deficiencies that we consider to be material weaknesses, significant deficiencies and other matters that are of a lesser magnitude than a significant deficiency. - - A control deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A deficiency in design exists when a control necessary to meet the control objective is missing, or when an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or qualifications to perform the control effectively. - - A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected and corrected on a timely basis. - A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. - - - II Racquct Roa.l. 1'.0. Bo, 100m ~CII hurgh. NY I ~550 IX~~1 ~(,7.')(KK)!"a, (X~5) 567.'.mX hllp: II 1111. I.lUII.<OIll ~6~1 South Awnu.. 1'.0. II", '15 "'apping." hilI>. ~ Y 11590 (X~5) '}(15.'Ill(Xl Fax (X~5) '1tI5.'1'JH~ hllp: 111\11.\.1.1\\.<0111 5 510 Whil. Plain. Road. SUIt. 500 rarry(,,"n. NY 10591 IX~5) 567.'}(HJO Fax (X45) 567.'J!21\ hllp: 1111 II. \u.I\\ .<om - - - New Hackensack Fire District Report to the Board of Commissioners May 18,2011 - Identified Deficiencies in Internal Control - Capital Assets The District has not adopted a policy for capitalization of assets and does not maintain an adequate capital asset listing for New York State Annual Financial Reporting. The listing should include important information, such as the date that each item was purchased, date of disposal (if applicable) and historical cost. Capital assets are to be accurately reported on the Annual Financial Report to New York State. The District should also have an adopted policy defining the criteria for assets reported so that the District can accurately account for its capital assets on the Annual Financial Report for New York State. We recommend that the District adopt a capitalization policy of $20,000 and compile and maintain a list of capital assets over this amount. Credit Cards VDDW could not locate support for multiple charges on the gas credit cards that had been approved for payment by the Board. The Board has the responsibility of fiscal oversight over all financial functions of the District. All purchases, when reasonably possible, should be made with prior authorization from the Board. The Board should also review support for all credit card charges in order to ensure that they are for District purposes. The district policy should require that all charges be supported by receipts in order to limit the District's exposure to unauthorized charges. Pavrol/ We noted that payroll is not being properly posted in Quickbooks. The gross payroll in the District's accounting records should be equivalent to the gross payroll on the W-3 statement at year end. Currently, the District only records the net payroll check to salary expense biweeekly and separately records payroll tax expense only for the employer portions of tax when it is paid. We recommend recording the gross payroll to payroll expense and the employer portion ofthe taxes to payroll tax expense. Payroll and payroll tax expense is approved by the board for payment. However we recommend that the payroll reports be reviewed by a designated board member. VDDW recommend that timesheets be compared to the schedule or that a designated individual signs-off on the time sheets to indicate approval of the hours reported by per diem firefighters - - - - - - - - Procurement Po/icv The District did not maintain the proper documentation of verbal and written quotes for purchases requiring such documentation. The General Municipal Law of New York State requires districts to adopt and follow a procurement policy. During 2011, the District did not maintain the documentation necessary to comply with the policy; therefore, the District did not comply with the General Municipal Law of New York State. We recommend that the District review and adhere to the policy. The acceptance ofa bid should be included in the minutes and the a copy of the bid should be kept on file. Also the approved bid should be compared to the voucher before payment is approved. - - - Conflict of Interest Disclosure Forms NY regulations require elected or appointed officials to disclose any interests in any actual or proposed contract. The District has not adopted a written policy describing how related party transactions will be considered, decided upon and documented. The District also has not adopted the use of a conflict of interest disclosure form to be completed by all of those charged with governance and others who have a fiduciary responsibility to the District. As a result, members of the Board may not be aware of all conflicts of interests in any actual or proposed contract. VDDW recommends that the District adopt a written policy describing how transactions such as these will be considered and decided upon, and adopt the use of a conflict of interest disclosure form to be completed annually by all of those charged with governance and others who have a fiduciary responsibility to the District. - - - 6 - - - New Hackensack Fire District Report to the Board of Commissioners May 18,2011 - We consider the following matters to be compliance issues. Fund Balance Condition: The District's unappropriated unreserved general fund balance is greater than the New York State recommended threshold. Criteria: New York State Law details that a "reasonable amount" of unappropriated unreserved fund balance may be retained for each fund, consistent with prudent budgeting practices, in order to ensure the orderly operation of the services. New York State outlines the timing of receipts and disbursements as the primary consideration for Fire Districts in assessing what is reasonable. New York State has indicated that the target threshold should be equal to 10% of the subsequent years budgeted appropriations. Cause: The District has not established a "reasonable fund balance" target amount and the unappropriated unreserved fund balance is greater than the standard threshold set by New York State. Effect: The District is holding more cash in the General Fund than necessary to bridge the gap between the end of the fiscal year and the receipt of the subsequent tax revenue from the Town of Wappinger. Recommendation: VDDW recommends that the District determine and document what is reasonable and then develop a plan to reduce the unreserved fund balance to that amount. - - - - - - The following are descriptions of management suggestions: Bank Reconciliations - VDDW reviewed the bank reconciliations for the years ended December 31,201 I. VDDW noted that was an check dated September I, 2009 shown as outstanding on December 30, 2011 back reconciliation. VDDW recommends that the Board compare bank reconciliations to bank statements for unusual items such as this and that the Treasurer void checks that are outstanding over six months. These checks should be researched to determine if they need to be reissued. It was noted that the bank statements are mailed to the treasurer's residence. Since the treasurer is responsible for performing the bank reconciliation and the preparation of cash disbursements, VDDW recommends that the bank statements be sent to the district office or to a commissioner. A designated commissioner should receive and review the unopened bank statement. It was indicated to VDDW that a commissioner reviews the bank statements and bank reconciliation. We could note find limited indication that this review had been performed. We recommend the commissioner indicated the performance of this review procedure by initialing the reconciliation and bank statement. - - - - Instances of Control Discrevancies The District uses pre-printed checks which are issued through QuickBooks. Since QuickBooks issues checks sequentially and provide the audit trail, it is important to match the pre-numbered check stock to the system's check numbers. During our testing, we noted check sequencing errors. We also noted that one invoice selected for testing could not be located. Although these issues may be isolated instances and not systemic problems, we recommend reviewing these areas to determine if additional controls should be implemented. In addition, when instances such as these are found, the circumstances and method of remediation should be documented. Ovportunities for Strenfltheninf! Internal Controls and Procedures The treasurer prepares and submits to the board of commissioners a treasurer's report for their review and approval. The review and approval of the treasurer's report should be indicated in the approved board minutes. - - - - 7 - - - New Hackensack Fire District Report to the Board of Commissioners May 18,2011 - - For Infonnational Purposes: Legislative Audit requirements state that the District is to send the audit report to the Office of the State Comptroller within 180 days of year end and to prepare a corrective action plan in response to any findings contained in the annual audit report within 90 days of receipt of the report. The following is the address to send the financial statement: - - State of New York Office of the State Comptroller Division of Local Government Services Data Management Unit 110 State Street, 12-8-C Albany, NY 12236-0001 - This report is intended solely for the information and use ofthe Board of Commissioners. Very truly yours, - - VANACORE, DeBENEDICTUS, DiGOV ANNI & WEDDELL Limited Liability Partnership ~; a (:5t'VI/ / ~/:}. (//r? Tonia A. Crown, CPA, ClTP Partner - - - - .. - - - - 8 - - - - - - - - - - Exhibit B - Certain Written Communications Between Management and Our Firm - - - - - - - - - - - - ~~ - ~- ~~ VANACORE DEBENEDICTUS ~ DIGOVANNI ~ WEDDELL - IJMITED lIABIlITY PARThESHIP BUSINESS DEVELOPME'iT CONSULTANTS CERTIFIED PUBIJC ACCOUNTA..'ITS 11 RACQUET ROAD, PO BOX 10009.NEWBURGH, NY 12552-0009 - May 4, 2012 - - Board of Fire Commissioners New Hackensack Fire District 217 Meyers Comers Road Wappingers Falls, NY 12590 - Attention: Roderick Macleod, Chair of the Board of Fire Commissioners - This letter is to explain our understanding of the arrangements for the services we are to perform for New Hackensack Fire District ("the District") for the year ended December 31, 2011. We ask that you either confirm or amend that understanding. Audit Services We will perform an audit of New Hackensack Fire District's Balance Sheet, Results of Operation and Changes in Fund Equity and Budgetary Comparison as of and for the year ended December 31,2011. We understand that these financial statements will be prepared in accordance with the New York State Uniform System of Accounts basis of accounting. The objective of an audit of financial statements is to express an opinion on those statements. We are responsible for forming and expressing an opinion about whether the financial statements that have been prepared by management, with the oversight of the Board of Fire Commissioners, are presented fairly, in all material respects, in conformity with the New York State Uniform System of Accounts. We will conduct the audit in accordance with auditing standards generally accepted in the United States of America and "Government Auditing Standards". issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstat~ment, whether caused by error or fraud. Accordingly, a material misstatement, may remain undetected. Also, an audit is not designed to detect errors or fraud that are immaterial to the financial statements. The determination of abuse is subjective; therefore, Government Auditing Standards do not expect us to provide reasonable assurance of detecting abuse. An audit of financial statements includes obtaining an understanding of the District and its enviropment, including its internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing and extent of further audit procedures. An audit is not designed to provide assurance on internal control or to identity significant deficiencies or material weaknesses. However, we will communicate to management and the Board of Fire Commissioners any significant deficiencies or material weaknesses that we become aware of during the. course of the audit. - - - - - - - - - II Racquet Road, P.O. Box 10009 Newburgb, NY 12S50 (845) 561-9000 Fax (845) 561-9228 bnp:/Iwww.vckhv.com , 2622 Soulb Avenue. P.O. Box 95 Woppingers Fall.. NY 12590 (845) 9OS-9000 FllX (84S) 905-9904 hup:JJwww.vddw.com S20 White Plains Road. Suite SOO TalT)'lown, NY IOS91 (845) 561-9000 FIlX (84S) 561-9228 http://w\vw.vddw.com 9 - - - New Hackensack Fire District May 4, 2012 Page 2 - We will also communicate to the Board of Fire Commissioners (a) any fraud involving senior management and fraud (whether caused by senior management or other employees) that causes a material misstatement of the financial statements that becomes known to us during the audit, (b) any illegal acts that we become aware of during the audit (unless they are clearly inconsequential), (c) various matters related to the District's accounting policies and financial statements and (d) any disagreements with management or other serious difficulties encountered in performing the audit, should any arise. In addition to our report(s) on the New Hackensack Fire District's financial statements, we will also issue the following reports or types of reports: Report on internal control related to the financial statements. This report will describe the scope of testing of internal control and the results of our tests of internal controls. - - - Report on compliance with laws, regulations and the provision of contracts or grant agreements. We will report on any noncompliance which could have a material effect on the financial statements. The funds and account groups that you have told us are maintained by the District and that are to be included as part of our audit are listed as follows: - * General Fund * Reserve Fund * Agency Fund - Our report on internal control will include any significant deficiencies and material weaknesses in the system of which we become aware as a result of obtaining an understanding of internal control and performing tests of internal control consistent with requirements of the standards identified above. Our report on compliance will address material errors, fraud, abuse, violations of compliance requirements, and other responsibilities imposed by state and federal statutes and regulations and assumed by contracts; and any state or federal grant, entitlement or loan program questioned costs of which we become aware, consistent withrequirements ofthe standards identified above. New Hackensack Fire District's Responsibilities Management is responsible for the financial statements, including the selection and application of accounting policies, adjusting the financial statements to correct material misstatements, and for making all financial records and related information available to us. Management is responsible for providing us with a written llJanagement representation letter confirming certain representations made during the course of our audit of the financial statements and affirming to us that it believes 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. Management is responsible for establishing and maintaining effective internal control over financial reporting and for informing us of all significant deficiencies and material weaknesses in the design or operation of such controls of which it has knowledge. Management is responsible for identifying and ensuring that the entity complies with the laws and regulations applicable to its activities, and for informing us about all known material violations of such laws or regulations. In addition, management is 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 entity involving management, employees who have significant roles in internal control and others where the fraud could have a material effect on the financial statements. Management is also responsible for informing us of its knowledge of any allegations of fraud or suspected fraud affecting the entity received in communications from employees, former employees, analysts, regulators or others. Management is oalso responsible for (a) making us aware of significant vendor relationships where the vendor is responsible for program compliance, (b) following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior audit findings and a corrective action plan and (c) report distribution, including submitting the reporting package to New York State. The Board of Fire Commissioners is responsible for informing us of its views about the risks of fraud within the District, and its knowledge of any fraud or suspected fraud affecting the District. - - - - - - - - - - 10 - - - New Hackensack i?ire District May 4, 2012 Page 3 - The District agrees that it will not include our repons, or otherwise make reference to us, in any public or private securities offering without first obtaining our consent. Any request to consent is also a matter for which separate arrangements will be necessary. After obtaining our consent, the District also agrees to provide us with printer's proofs or masters of such offering documents for our review and approval before printing and with a copy of the final reproduced material for our approval before it is distributed. In the event our auditor/client relationship has been terminated when the District seeks such consent, we will be under no obligation to grant such consent or approval. Because Vanacore, DeBenedictus, DiGovanni and Weddell, LLP will rely on New Hackensack Fire District and its management and Board to discharge the foregoing responsibilities, New Hackensack Fire District holds harmless and releases Vanacore, DeBenedictus, DiGovanni and Weddell, LLP, its partners and employees from all claims, liabilities, losses and costs arising in circumstances where there has been a knowing misrepresentation by a member of New Hackensack Fire District's management which has caused, in any respect, Vanacore, DeBenedictus, DiGovanni and Weddell, LLP's breach of c,ontract or negligence. This provision shall survive the termination of this arrangement for services. New Hackensack Fire District's Records and Assistance - - - - - If circumstances arise relating to the condition of the District's records, the availability of appropriate audit evidence, or indications of a significant risk of material misstatement of the financial statements because of error, fraudulent financial reponing or misappropriation of assets which, in our professional judgment, prevent us from completing the audit or forming an opinion, we retain the unilateral right to take any course of action permitted by professional standards, including declining to express an opinion or issue a repon, or withdrawal from the engagement. During the course of our engagement, we may accumulate, records containing data that should be reflected in the District's books and records. The District will determine that all such data, if necessary, will be so reflected. Accordingly, the District will not expect us to maintain copies of such records in our possession. The assistance to be supplied by District personnel, including the preparation of schedules and analyses of accounts, will be discussed and coordinated with Frank Borquist, Treasurer. The timely and accurate completion of this work is an essential condition to our completion ofthe audit and issuance of our audit report. If, in connection with our audit, you request us to perform accounting services necessary for the preparation of the financial statements (such as maintaining depreciation schedules, drafting the financial statements, etc.), you agree to designate an appropriate individual to oversee the services, make all management decisions involved in those services, evaluate the adequacy and results of the services, and accept responsibility for the results of the services. From time to time and depending upon the circumstances, we may use third-party service providers to assist us in providing professional services to you. In such circumstances, it may be necessary for us to disclose confidential client information to them. We enter into confidentiality agreements with all third-party service providers and we are satisfied that they have appropriate procedures in place to prevent the unauthori;/:ed release of your confidenlial information to others. - - - - - - Fees, Costs, and Access to Workpapers Our fees for the services described above are based upon the time required by the individuals assigned to the engagement, plus direct expenses. We propose that our fee for this audit engagement will be $6,900 for the year ended December 31, 2011. This fee estimate will be subject to adjustments based on unanticipated changes in the scope of our work andlor the incomplete or untimely receipt by us of the information on the client participation list. All other provisions of this letter will survive any fee adjustment. Interim billings will be submitted as work progresses. Billings are due upon submission. - - - - 11 - - - New Hackensack Fire District May 4, 2012 Page 4 - It is agreed by New Hackensack Fire District and Vanacore, DeBenedictus, DiGovanni & Weddell, LLP that, should you hire any of our professionals assigned to this project within eighteen months of this assignment, you will be billed 100 percent of their current annual salary. This additional fee is being charged to offset recruitment, training and development expenses we would incur to replace this person. In addition, our professional standards require that we perform certain additional procedures, on current and previous years' engagements, whenever a partner or professional employee leaves the firm and is subsequently employed by, or associated with, a client in a key position. Accordingly, the District agrees it will compensate Vanacore, DeBenedictus, DiGovanni & Weddell, LLP for any additional costs incurred as a result of the District's employment ofa partner or professional employee of Vanacore, DeBenedictus, DiGovanni & Weddell, LLP. In the event we are requested or authorized by New Hackensack Fire District, or are required by government regulation, subpoena or other legal process, to produce our documents or our personnel as witnesses with respect to our engagements for New Hackensack Fire District, New Hackensack Fire District will, so long as we are not a party to the proceeding in which the information is sought, reimburse us for our professional time and expenses, as well as the fees and expenses of our counsel, incurred in responding to such requests. Claim Resolution It is agreed by the New Hackensack Fire District and Vanacore, DeBenedictus, DiGovanni & Weddell, LLP,.or any successors in interest, that no claim arising out of services rendered pursuant to this agreement by or on behalf of the District shall be asserted more than two years after the date of the last audit report issued by' Vanacore, DeBenedictus, DiGovanni & Weddell, LLP. If any dispute arises among the parties hereto, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Rules for Professional Accounting and Related Services Disputes before resorting to litigation. The costs of any mediation proceeding shall be shared equally by all parties. Additional Terms of Our Engagement This letter constitutes the complete and exclusive statement of agreement between Vanacore, DeBenedictus, DiGovanni & Weddell, LLP and New Hackensack Fire District, superseding all proposals, oral or written, and all other communications, with respect to the terms of the engagement between the parties. In accordance with Government Auditing Standards, a copy of our most recent peer review report has been provided for your information. If this letter defines the arrangements as you understand them, please sign and date the enclosed copy and return it to us. We appreciate your business. - - - - - - - - - - Sincerely, VANACORE, DeBENEDICTUS, DiGOV ANN I & WEDDELL Limited Liability Partnership - - ~ da~;,~#. C/?)O Tonia A. Crown, CPA, CITP Partner By: Confirmed on behalf of the addressee: Ne~ackensack Fire Di~ct /A~ rf.U-;C.l. Roderick J. Mac Leod Chairman Board of Fire Commissioners .... ~ 8': Uk"" Date - - - 12 - - - wVew Q#~~~ - 217 Myers Corners Road Wappingers Falls, New York 12590 - - g)~o/dT~ ~~ Roderick J, Mac Leod, Chairman J. Howard Prager Joseph J. Norton Robert Bitzko 67~-rff~ Frank Borquist - ~o/udy rf/ecIJld<Muy- rff~ Dennis Lasowski - .~idnd dT~ Cfihie/ Richard Andersen - June 27, 2012 - - Vanacore, DeBenedictus, DiGovanni & Weddell ' Limited Liability P~nership 11 Racquet Road P.O. Box 10009 Newburgh, NY 12552 - - In connection with your audit of the basic financial statements of the New Hackensack Fire District as of and for the year ended December 31, 2011, we confirm that we ate responsible for the fair presentation in the statements of financial position and results of operations in conformity with the New Y Qrk' State System of Accounts basis of accounting. - We confirm, ~o the !Jest of our knowledge and belief as of June 27, 2012, the following representations made to you during your audit: - 1. - 2. 3. - The financial statements referred to above are fairly presehte'd in conformity with the New York State System of Accounts basis of accounting. We have identified for you all of our funds and governmental functions. We have properly classified all funds and activities. - - 13 - - - oJVew ~ c$~ PJ)Mbic/ 2/7 rYllym<6 ~~ f!J?oad O'f~ ~aa, 0'1'" [JIMIe /25.90 - - 4. - - - 5. - - - - 6. - - - - - - - - We are responsible for: a. Compliance with laws, regulations and provisions of contracts and grant agreements applicable to the New Hackensack Fire District, including adopting, approving and amending budgets. b. Establishing and maintaining effective internal control over reporting and compliance. We have identified and disclosed to yuo: a. All laws, regulations and provisions of contracts.and grant agreements and have a direct and material effect on the determinations of financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds, and other financial data significant to audit objectives. b. Any violations or possible violations of laws, regulations and provisions of contracts and grant agreements whose effects should be considered for disclosure in the auditor's report on noncompliance. We have made available to you: a. All financial records and related data of all funds and activities, including those of all special funds, programs, departments, projects, activities, etc., in existence at any time during the period covered by your audit. b. All minutes of the meetings of the governing board and committees of board members or summaries of actions of recent meetings for which minutes have not yet been prepared. c. All communications from grantors, lenders, other funding sources or regulatory agencies concerning noncompliance with: 1. ii. Statutory, regulatory or contractual provisions or requirements. Financial reporting practices that could have a material effect on .1..,... -h_n_",~nl ,..+",.....--.a......+~ 14 - - CYVew ~ @""Wce PlJiJbid 217 014--- ~~ 'PIkul Vf~ ~, GVf'" 8/-ie 125.90 - 7. We have no knowledge of fraud or suspected fraud affecting the entity involving: - - - - - - 10. - 11. - 12. - 13. - - - - - - - a. Management, b. Employees who have significant roles in the internal control, or c. Others where the fraud could have a material effeCt on the financial statements. 8. We acknowledge our responsibility for the design ahd implementation of programs and controls to provide reasonable assurance that fraud is prevented and detected. 9. We have no knowledge of any allegations of fraud or suspected fraud affecting the New Hackensack Fire District received in communications from employees, former employees, analysts, regulators, short sellers or others. We have informed you of ali significant deficiencies, including material weaknesses, in the design or operation of internal controls that could adversely affect the District's ability to record, process, stlIIlmarize and report financial data. There have been no communications from regulatory. agencies concerning noncompliance with, or deficiencies in, financial reporting practices. We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities. The following have been properly recotded and/or disclosed in the financial statements: a. Related party transactions, including those with other organizations for which the nature and significance of their relationship with the New Hackensack Fire District are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete as defined in Section 2100 of the Governmental Accounting Standards Board's Codification of Governmental Accounting.and Financial Reporting Standards, and interfund transactions, including interfund accounts and advances receivable and payable, sale and purchase transactions, interfund . transfers, long-term loans; leasing arrangements and guarantees, all of which have been recorded in accordance with the economic substance of the transaction and appropriately classified and reported. 15 - - GYVew ~ @"~ Pl5f4bid 217 ~ty<>><> 'if01'n<>><> fJJkd O'f~ Q1raa, QA~ 8Y~ 125.90 - - - c. - d. - e. - f. - - - 14. - - - 15. - - - - - b. Arrangements with financial institutionsirivolving compensating balances or other arrangements involving restrictions on cash balances and line of credit or similar arrangements. Any other liens or encumbrances on assets or revenues or any assets or revenues which were pledged as collateral for any liability which were subordinated in any way. ' Amounts of contractual obligations for construction and purchase of real property or equipment not included in the liabilities or encumbrances recorded on the books. Debt issue provisions. All significant estimates and material concentrations known to management which are required to be disclosed in accordance with the accounting standards. Significant estimates ate estimates at the balance sheet date which could change materially within the next year. Concentrations refer to volumes of business, revenues, available sources of supply, .or markets for whi<<h events could occur which would significantly disrupt normal finances within the next year. g. Authorized but unissued bonds. We are responsible for making the accounting estimates included in the financial statements. These statements reflect our judgment based on our knowledge and experience about past and current events and our assumption about conditions we expect to exist and courses of action we expect to take. There are no: a. Material transactions that have not been properly recorded in the accounting records underlying the financial statements. For purposes of this representation, we consider items to be material, regardless of their size, if they involve the misstatement or omission of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. 16 - - Q/Vew ~ @""Mee PlJidbid 217 Q/ftylml ~__ '!!ICoad ClJ'f/afFn?1ml @aIt;;, oA~ 8/r>>k 125.90 - - - - - - - 17. - 18. - 19. - 20. - - - - - - - b. Violations or possible violations of laws or reg'ulations whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency. In that regard, we specifically represent that we have not been designated as, or alleged to be, a "potentially responsible party" by the Federal Environmental Protection Agency or any equivalent state agencies in connecfion With any environmental contamination. ' c. Other material liabilities or gain or loss contingencies that are required to be accrued or disclosed under financial or governmental accounting standards. 16. We are not aware of any pending or threatened litigation, claims or assessments, or unasserted claims or assessments that are required to be accrued or disclosed in the financial statements in accordance with the Contingencies Topic of the Accounting Standards Codification and we have not consulted a lawyer concerning litigation, claims or assessments. ' We have no direct or indirect, legal or moral, obligation for any debt of any organization, public or private, that is not disclosed in the financial statements. We have satisfactory title to all owned assets. We have complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of noncompliance. We are responsible for and have reviewed and approved the proposed adjustments to the trial balances identified during the audit, which are included in the summarized schedule of posted adjustments, and will post all adjustments accordingly. We have reviewed, approved and are responsible for overseeing the preparation and completion of the basic financial statements and related notes. ' 21. We have a process to track the status of audit findin~s and recommendations. 22. We have provided you with our views on your reported findings and recommendations, as well as our planned corrective actions. 17 We are responsible for detertnining that significant events or transactions that have occurred since the balance sheet date and through June 27, 2012 have been recognized or disclosed in thefinancialstatemehts. No events or transactions other than those disclosed in the financial Statements have occurred subsequent to the balance sheet date and through June 27, 2012 that would require -recognition or disclosure in the financial statementk We further represent that, as of June 27, 2012, the financial statements were'complet~in a fomi and format.that complied with accounting principles generally.accepted in the United States of America, and all approvals necessary for issuance of the financial statements had been obtained. . - - - CYVew ~k @"~ P.lJidnd 217 Glfy<m> ~01'ne1<; Plku/ o/f/~ @~, GVVew 81~ 125.90 23. - - - - During the course of your audit, you may have accumulated records containing data which should be reflected in out books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. 24. - - - New Hackensack Fire District - - /2~ J ~-/2~ Fire Commissioner - - - - - - - 18 - ~jJ~ Treasurer .