2009-019 Finance - McGladrey & Pullen

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,. , Orange Courrty, North Carolina March 1fi, 2009 Page 2 An audit of financial statements also includes obtaining an understanding of the entity and its environment, including its inthmal control, suffiaent 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 identify significant deficiencies or material weaknesses. However, we will communicate to management and the audit committee, any significant deficiencies or material weaknesses that become known to us during the course of the audit. We will also communicate to the Board of County Commissioners (a) any fraud involving senior management and fraud (whether caused by senior management or other empbyees) that causes a material misstatement of the financial statementh, (b) any fraud, illegal acts, violations of provisions of contracts or grant agreements and abuse that come to our attention (unless they are clearly inconsequential), (c) any disagreements with management and other serious difficulties encountered in performing the audit, and (d) various matters related to the entity's acxounting policies and financial statements. 1n addition to our report on the County's financial statements, we will also issue the following reports or types of reports: A report on the fairness of the presentation of the County's schedule of expenditures of Federal and State awards for the year ending June 30, 2009. Reports on internal control related to the financial statements, and major programs. These reports will describe the scope of testing of internal control and the results of our tests of internal controls. Reports 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 and any noncompliance which could have a direct and material effect on each major program. A schedule of findings and questioned cats. . The funds that you have told us are maintained by the County and that are to be included as part of our audit are the same as in the CouMy's June 30, 2008 CAFR and are listed here: • General fund • Special revenue funds • Caprtal project funds • Enterprise funds • Internal service fund • Fiduciary funds The federal and state financi~ assistance programs that you have told us that the County participates in and that are to be included as part of the single audit compliance examination are the same as the ones in the Schedule of Federal and State Awards and ifie Slate Single Audit Implementation Act for the year ended June 30, 2008, included in the County's June 30, 2008 CAFR. The component units whose financial statements you have told us are to be combined with and included as part of the County's basic financial statements is the Orange County ABC Board. The Orange County ABC Board will be disclosed through discrete presentation as a component unit, as required by Governmental Accounting Standards Board ("GASB")14. Another CPA Firm will audit the Orange County ABC Board.