2009-019 Finance - McGladrey & Pullen

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Orange County, North Carolina March 16, 2009 Page 3 Our reports on intemal control will include any significant deficiencies and material weaknesses in the system of which we become aware as a result of obtaining an understanding of intemal control and performing tests of intemal control consistent with requirements of the standards and arcular identified above. Our reports on compliance will address material errors, fraud, abuse, violations of compliance requirements, and other responsibilities imposed by state and federal statutes and regulations and assumed by contracts; and any state or federal grant, entitlement of loan program questioned costs of which we become aware, consistent with requirements of the standards and circulars identifred above. Orange Counly, North Carolina's Responsibilities Management is responsible for the financial statements, including the selection and application of accounting policies, adjusting the financial statements to correct material misstatements, and for making all financial records and related information available to us. Management is responsib~ for providing us with a written management representation letter confirming certain representations made during the course of our audit of the financial statements and affirming to us that it believes the effects of any uncorrected misstatementh aggregated by us during the current engagement and pertaining to the latest period presented are immathrial, both individually and in the aggregate, to the financial statements taken as a whole and to the opinion units of the financial statements. Management is responsible for establishing and maintaining effective intemal control over financial reporting and for informing us of all significant deficiencies and material weaknesses in the design or operation of such controls of which it has knowledge. Management is responsible for identifying and ensuring that the entity complies with the laws and regulations applicable to its activities, and for informing us about all known material violations of such laws or regulations. In addition, management is responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about alt known or suspected fraud affecting the entity involving management, employees who have significant roles in intemal control, and others where the fraud could have a material effect on the financial statements. Management is also responsible for informing us of its knowledge of any allegations of fraud or suspected fraud affecting the entity received in communications from employees, fom~er employees, analysts, regulators, or others. Management is also responsible for (a) making us aware of significant vendor relationships where the vender is responsible for program compliance, (b) following up and taking corrective action on audit findings, including the preparation of a summary schedule of prior audit findings, and a corrective action plan, and (c) report distribution including submitting the reporting packages. The Board of County Commissioners are responsible for informing us of its views about the risks of fraud within the entity, and its knowledge of any fraud or suspected fraud affecting the entity. The County agrees that our report on the financial statements will not be included in an official statement or other document involved with the sale of debt instruments without our prior consent. Additionally, if the County intends to publish or otherwise reproduce the financial sthtementh and/or make reference to us or our audit, you agree to provide us with printer's proofs or a master for our review and consent before reproduction and/or release occurs. You also agree to provide us with a copy of the final reproduced material for our consent before it is distributed or released. Our fees for any additional services that may be required under our quality assurance systems as a result of the above will be established with you at the time such services are determined to be necessary. In the event our auditor/client relationship has been terminated when the Organization seeks such consent, we will be under no obligation to grant such consent or approval.