Speaking of Audits for Municipalities -

Management Letter
 At the conclusion of each audit a management letter may issued by the Independent Auditor.
 It is not required if there are no findings that are considered significant.
 It is a good idea to get a copy of recent management letters before you start reviewing the
    actual financial statements.
 The management letter does not provide an opinion but instead deals with the Auditor’s
    evaluation of the Town’s internal control over financial reporting.
 The internal control evaluation is limited and will not identify all weaknesses.
 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 misstatements on a timely basis.

Sections of the Auditor’s Report
 Report on the Financial Statements
This defines the statements being audited
Management’s Responsibility for the Financial Statements
This tells the reader that management is responsible for the fair presentation in accordance with
    GAAP; that management is responsible for Internal Controls; and free from material
    misstatement due to error or fraud.

Looking at the management letter for 2011, for Templeton by Melanson Heath, I find this:

Improve segregation of duties in sewer department (significant deficiency)

Town's response: The sewer department has no response at this time.

Perform periodic internal audits of departmental receipts.

Town's response: The Town agrees with this recommendation

Other prior year issues - 

        Computer passwords, should be changed periodically.

Town's response - agreed.

delinquent recievables - all delinquent prior year real estate tax receivables should be liened.

Town's response - agreed. Is this being done today in 2016?

Current year issues:

Reconcile tax title receivables - in fiscal 2011 the town accountant established a new general ledger accounts to track tax title receivables in the general, water and sewer funds. Although current year activity was posted to these accounts, all prior year activity remains in the previous generic general fund account. (Could this be one of the "problems"?) We recommend the prior year activity be analyzed and be reconciled to the treasurer's detail receivable records.

Town response - agreed

The above is a partial summary of the management letter for 2011 with regards to recommendations and status of current and prior year analysis.

posted by Jeff Bennett