HomeMy WebLinkAbout2011 05.31 Management Comment Letter Village of Cayuga Heights.pdfCORTLAND ITHACA WATKINS GLEN
John H. Dietershagen, C.P.A.
Jerry E. Mickelson, C.P.A.
Thomas K. Van Derzee, C.P.A.
Debbie Conley Jordan, C.P.A.
Patrick S. Jordan, C.P.A.
Duane R. Shoen, C.P.A.
Lesley L. Horner, C.P.A.
D. Leslie Spurgin, C.P.A.
Frederick J. Ciaschi, C.P.A.
Certified Public Accountants and Consultants
Ciaschi Dietershagen Little Mickelson
& Company, LLP
39 Church Street
Cortland, New York 13045
607-753-7439
fax 607-753-7874
108 West Fourth Street
Watkins Glen, New York 14891
607-535-4443
fax 607-535-6220
401 East State Street ~ Suite 500
Ithaca, New York 14850
607-272-4444
fax 607-273-8372
www.cdlm.com
MANAGEMENT COMMENT LETTER
Mayor and Village Trustees
Village of Cayuga Heights
Ithaca,New York
In planning and performing our audit of the financial statements of the governmental activities, each major
fund, and the aggregate remaining fund information of the Village of Cayuga Heights (the Village) as of and for
the year ended May 31, 2011, in accordance with auditing standards generally accepted in the United States of
America, we considered the Village’s internal control over financial reporting (internal control) as a basis for
designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but
not for the purpose of expressing an opinion on the effectiveness of the Village’s internal control.Accordingly,
we do not express an opinion on the effectiveness of the Village’s internal control.
A 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 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 entity’s financial
statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control was for the limited purpose described in the first 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 such deficiencies have been identified.We did not identify any
deficiencies in internal control that we consider to be material weaknesses.
During our audit, we became aware of a certain other matter that provides an opportunity for strengthening
internal controls and operating efficiency.
OTHER MAT TERS
Review of Journal Entries
Finding:
During our current year audit, we noted the Treasurer initiates and posts journal entries without any formal
type of review.
Recommendation:
We recommend the Village implement a review policy for all journal entries.
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Current Year Discussion Item
Governmental Accounting Standards Board (GASB)Statement Number 54, “Fund Balance Reporting and
Governmental Fund Type Definitions”
GASB Statement Number 54 establishes fund balance classifications that comprise a hierarchy based
primarily on the extent to which a government is bound to observe constraints imposed upon the use of resources
reported in Governmental Funds to be effective for the 2011-12 fiscal year. The initial distinction made in reporting
fund balance information is identifying amounts considered nonspendable, such as fund balance associated with
inventories. This statement also provides for additional classification as restricted, committed, assigned, and
unassigned based on the relative strength of constraints controlling how specific amounts can be spent.
Governments are also required to classify and report amounts in the appropriate fund balance classifications by
applying their accounting policies that determine whether restricted, committed, assigned, and unassigned
amounts are considered to have been spent. Disclosure of the policies in the notes to the financial statements is
required.
The definitions of the General Fund, Special Revenue Fund type, and Capital Projects Fund type are clarified
by the provisions in this statement.Interpretations of certain terms within the definition of the Special Revenue
Fund type have been provided and, for some governments, those interpretations may affect the activities they
choose to report in those funds.
This letter does not affect our report dated March 6, 2012 on the financial statements of the Village of
Cayuga Heights.
We would like to take this opportunity to express our appreciation to the Village management and staff for
their time and cooperation in aiding us in our audit work. It has been a pleasure to provide auditing services to
you. We look forward to assisting you with other matters in the future.
This communication is intended solely for the information and use of management,the Board of Trustees,
and others within the Village of Cayuga Heights and is not intended to be and should not be used by anyone
other than these specified parties.
March 6, 2012
Ithaca, New York