2008-027 Finance - Cherry Bekaert & Holland 2007 Audit

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Orange County, North Carogna Apn'I 23, 2007 . Page 2 Reports on compliance with laws, regulations, and the provision of crontracts or grant agreemer>ts. We wiq report on arty noncompgance which could have a material effect on the financial statements and arty notx:ornpliarrce wh'~ctr could have a direct and material effect on each mapr program. A schedule of findings and questioned costs. Communication with the County's Board relating to the conduct of the audit as required by GovemmentAudidng Standards. The funds that you have told us are maintained by the County and that are th be included as part of our audd are listed below: General fund Special revenue funds Capital projects funds Proprietary funds Fiduciary funds The federal and state financial assistance programs that you have told us that the County participates in and that are to be included as part of the single audrt compliance examination are listed in Attachment A. The component unit whose financial statements you have told us are io 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 Aa:ounting Standards Board (°GASB'~ 14. Another CPA Frm will audd the Orange County ABC Board. Our reports on internal control will include arty sign~icant deficiencles and material weaknesses in the system of which we become aware as a result of obtaining an understanding of internal control and performing tests of internal control consistent with requirements of the standards and circular identified above. Our reports on compliance will address material errors, fraud, 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 or loan program questioned costs of which we become aware, consistent with requirements of the standards and circulars identified above. If circumstances arise relating to the condition of the County's records, the availability of sufficient, competent evidential matter, or indications of a significant risk of material misstatement of the financlai statements because of error, fraudulent financial reporting, misappropriation of assets, or noncompliance whicth in our professional judgment prevent us from completing the audit or forming an opinion, we retain the ungateral right to take any course of action permitted by professional standards, including declining to express an opinion or issue a report, or withdrawal from the engagement. As you know, management is responsq~le for (1) the preparation of the County's financlal statements and the schedule of Federal and State awards, (2) establishing and maintaining effective internal contrd over financial reporting and safeguarding assets and internal control over compgance, including monitoring ongang activities, and for informing us of all significant defiaencies in the design or operation of such controls of which it has knowledge (3} properly recording transactions in the records, (4) identifying and ensuring that the County complies with the laws and regulations applicable to its activities, and for informing us about all known material violations of such laws or regulations, (5) the design and impl~nentation of programs and controls to prevent and detect fraud, and for informing us about aq known or suspected fraud affecting the entity involving management, empkryees who have significant roles in ir>temal cx~rrtrol and others where the fraud could have a material effect on the financal . statements, (6) informing us of its knowledge of any agegations of fraud or suspected fraud affecfmg the entity