2009-019 Finance - McGladrey & Pullen

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McGladrey & Pullen Certified Public Accountants March 16, 2009 The Honorable Manager and Members of the County Commissioners Orange County, North Carolina Hillsborough, North Carolina Attention: Mr. Gary Humphreys, Financial Services Director tt: McGladrey b Pullen, LLP 230 North Elm St., Ste. 1100, Greensboro, NC 27401-2436 P.O. Box 2470, Greensboro, NC 27402-2470 0 336.273.4461 F 3362741519 www.mcgladrey.com This letter is to explain our understanding of the arrangements for the services we are to perform for the Orange County, North Carolina (the "County") for the year ending June 30, 2009. We ask that you either confine or amend this understanding. Audit Services We will perform an audit of the County's governmental activities, business-type activities, aggregate discretely presented component unit, each major fund, aggregate remaining fund information and budgetary comparison for the general fund as of and for the year ending June 30, 2009 which collectively comprise the basic financial statements. We understand that these financial statements will be prepared in accordance with accounting principles generally accepted in the United States of America. The objective of an audit of financial statements is to express an opinion on those statements. We an: 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 County Commissioners are presented fairly, in all material respects, inconformity with accounting principles generally accepted in the United States of America. We will also perform the audit of the County as of June 30, 2009 so as to satisfy the audit requirements imposed by the Single Audit Act, the U.S. Office of Management and Budget ("OMB")Circular No. A-133 and the State Single Audit Implementation Act of North Carolina. We will conduct the audit in accordance with auditing standards generally accepted in the United States of America; "Government Auditing Standards" issued by the Comptroller General of the United States; the provisions of the Single Audit Act, OMB Circular A-133 and OMB's Compliance Supplement; and, the State Single Audit Implementation Act. Those standards, circulars, supplemenbs or guides require that we plan and perform the audit to obtain reasonable rather than absolute, assurance about whether the financial statements are free of material misstatement 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. McGladrey & Pullen, LLP is a member firm of RSM International - anaffiliation of separate and independent legal entities.