2002 S Finance - Cherry, Bekaert & Holland

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As required by OMB Circular A-133 and the State Single Audit Implementation Act,we will perform tests of controls to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements,applicable to each major federal and State award program. However, our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly,no opinion will be expressed in our report on internal control issued pursuant to OMB Circular A-133 and the State Single Audit Implementation Act. We are prepared at your request to perform a more in-depth assessment of the County's internal control tructure, and report our findings and recommendations, or to conduct an examination engagement on the effectiveness of your internal control structure. We would be pleased to discuss fees for these services, which depend on their scope. RESPONSIBILITIES AS TO COMPLIANCE Our audit will be conducted in accordance with the standards referred to in the section Summary of Services. As part of obtaining reasonable assurance about whether the basic financial statements are free of material misstatement, we will perform tests of the County's compliance with applicable laws and regulations and the provisions of contracts and agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. OMB Circular A-133 and the State Single Audit Implementation Act requires that we also plan and perform the audit to obtain reasonable assurance about whether the auditee has complied with applicable laws and regulations and the provisions of contracts and grant agreements applicable to major programs. Our procedures will consist of the applicable procedures described in the OMB Circular A-133 Compliance Supplement and the Compliance Supplement provided by the Local Government Commission for auditors in North Carolina for the types of compliance requirements that could have a direct and material effect of each of the County's major programs. The purpose of those procedures will be to express an opinion on the County's compliance with requirements applicable to major programs in our report on compliance issued pursuant to OMB Circular A-133 and the State Single Audit Implementation Act. At the conclusion of the engagement, it is management's responsibility to submit the reporting package (including the basic financial statements, schedule of expenditures of federal and state awards, summary schedule of prior audit findings, auditor's reports, and corrective action plan) along with the Data collection Form to the designated federal clearinghouse and, if appropriate,to pass-through entities. The Data Collection Form and the reporting package must be submitted within the earlier of 30 days after receipt of the auditor's reports or 13 months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Our procedures relative to compliance with laws and regulations and internal control over financial reporting are limited to those discussed herein. We would be happy to discuss our procedures with you further at your request.