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HomeMy WebLinkAbout9594 2023 Communication LetterCOMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE AT THE CONCLUSION OF THE AUDIT Supervisor and Town Board Town of Groton Groton, New York We have audited the financial statements of the Town of Groton (the Town) as of and for the year ended December 31, 2023, and the related notes to the financial statements. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 25, 2024. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Town are described in Note 1 to the financial statements. During the year ended December 31, 2023, the Town adopted Governmental Accounting Standards Board (GASB) Statement No. 96, “Subscription-Based Information Technology Arrangements.” Other than the adoption of GASB Statement No. 96, no new accounting policies were adopted, and the application of existing policies was not changed during 2023. We noted no transactions entered into by the Town 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 assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the basic financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the financial statements was pension obligations. Management’s estimate of pension obligations is based on information provided by New York State employees’ retirement system in accordance with GASB Statement No. 68. We evaluated the key factors and assumptions used to develop these estimates in determining they are reasonable in relation to the financial statements taken as a whole. Insero & Co. CPA s, LLP The Highest Standard | (800) 232-9547 | www.inserocpa.com Town of Groton August 6, 2024 Page 2 Certain financial statement disclosures are particularly sensitive because of their significance to financial statements users. The most sensitive disclosure affecting the financial statements was related to the Town’s basis of accounting. The disclosure of “Summary of Significant Accounting Policies” (Note 1 to the financial statements) describes that the financial statements of the Town have been prepared in conformity with the accounting principles prescribed by the Accounting and Reporting Manual permitted by the Office of Comptroller of the State of New York to meet the requirements of New York State. This disclosure is not intended to be a complete presentation in accordance with accounting principles generally accepted in the United States (U.S. GAAP) established by the GASB. The financial statements do not include a Statement of Net Position or a Statement of Activities for the Governmental Activities, prepared on the accrual basis of accounting, a Management’s Discussion and Analysis, or other required supplementary information. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes corrected misstatements of the financial statements. There were no material uncorrected misstatements of financial information detected as a result of audit procedures. Disagreements With Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated August 6, 2024. Management Consultations With Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Town’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Town of Groton August 6, 2024 Page 3 Other Audit Findings or Issues As noted in the Independent Auditors’ Report, the accompanying financial statements are not presented in accordance with accounting principles generally accepted in the United States of America. We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Town's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We were engaged to report on the Combining Balance Sheet - Non-Major Governmental Funds and the Combining Statement of Revenues, Expenditures, and Changes in Fund Balance - Non-Major Governmental Funds which accompany the financial statements but are not required supplemental information. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We would like to thank you and your staff for the cooperation and support given to us during the course of the audit. We appreciate the opportunity to be of service to you and look forward to our continued involvement. Restriction on Use This information is intended solely for the information and use of the Town and management of the Town and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York August 6, 2024 TOWN OF GROTON SCHEDULE OF CORRECTED MISSTATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023 The following audit adjustments were reviewed, approved, and posted by management. Net Effect of Condition Prior to Adjustment Cause Adjustment General Town-Wide Fund Accrued Liabilities Understated Unadjusted Accrual (11,958)$ Prepaid Expense Overstated Unadjusted Accrual (3,954) Total General Town-Wide Fund Audit Adjustments (15,912)$ General Part-Town Fund Accrued Liabilities Understated Unadjusted Accrual (5,009)$ Prepaid Expense Overstated Unadjusted Accrual (1,656) Total General Part-Town Fund Audit Adjustments (6,665)$ Highway Town-Wide Fund Accrued Liabilities Understated Unadjusted Accrual (15,025)$ Prepaid Expense Overstated Unadjusted Accrual (4,968) Accounts Receivable Understated Unadjusted Accrual 3,700 Total Highway Town-Wide Fund Audit Adjustments (16,293)$ Highway Part-Town Fund Accrued Liabilities Understated Unadjusted Accrual (18,602)$ Prepaid Expense Overstated Unadjusted Accrual (6,151) Total Highway Part-Town Fund Audit Adjustments (24,753)$