Agenda - 12-01-1998 - 10c - Laserfiche WebLink

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Deloitte & Touche Deloitte &Touche LLP Suite 1800 First Union Capitol Center 150 Fayetteville Street Mall P.O. Box 2778 Raleigh, North Carolina 27602-2778 October 2, 1998 The Board of County Commissioners Orange County, North Carolina Telephone: (919) 546-8000 Telex: 4995716 Facsimile: (919) 833-3276 In planning and performing our audit of the general purpose financial statements of Orange County for the year ended June 30, 1998 (on which we have issued our report dated October 2, 1998), we considered its internal control in order to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on the Company's internal control. Such consideration would not necessarily disclose all matters in the Company's internal control that might be material weaknesses under standards established by the American Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the Company's internal control and its operations that we consider to be material weaknesses as defined above. We did note other matters related to the Company's internal control and certain other accounting or administrative matters. Our principal observations and recommendations are summarized below. MANAGEMENT SUPERVISION AND REVIEW Journal entries made by Finance Department staff were not properly reviewed and approved by the appropriate level of Finance Department management. The lack of approval appeared to be isolated to a specific period of occurrence, the majority of findings during the month of May 1998. These entries should be subject to review throughout the month, rather than only at month end to ensure the consistent and proper recording of County journal entries throughout the year. PURCHASING The Finance Department and Purchasing Department both retain copies of the Application and Certificate for Payment for all County purchases requiring purchase orders. During the current fiscal year, for a specific contractor, an overpayment occurred. The contractor refunded a portion of this overpayment, and retained the remaining payment for work to be performed. These activities were all handled and maintained through the Purchasing Department. This information DeloitteTouche Tohmatsu