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To the Board of Directors <br /> Page 2 <br /> Opinion on Each Major Federal Program <br /> In our opinion, Piedmont Health Services, Inc. complied, in all <br /> material respects, with the types of compliance requirements referred <br /> to above that could have a direct and material effect on each of its <br /> major federal programs for the year ended November 30, 2013. <br /> Report on Internal Control Over Compliance <br /> Management of Piedmont Health Services, Inc. is responsible for <br /> establishing and maintaining effective internal control over <br /> compliance with the types of . compliance requirements referred to <br /> above. In planning and performing our audit of compliance, we <br /> considered Piedmont Health Services, Inc. 's internal control over <br /> compliance with the types of requirements that could have a direct <br /> and material effect on each major federal program to determine the <br /> auditing procedures that are appropriate in the circumstances for the <br /> purpose of expressing an opinion on compliance for each major federal' <br /> program and to test and report on internal control over compliance in' <br /> accordance with OMB Circular A-133, but not for the purpose , of <br /> expressing an opinion on the effectiveness of internal control over <br /> compliance. Accordingly, we do not express an opinion on the <br /> effectiveness of Piedmont Health Services, Inc. 's internal control <br /> over compliance. <br /> A deficiency in internal control over compliance exists when - the <br /> design or operation of a control over compliance does not allow <br /> management or employees, in the normal course of performing their <br /> assignment functions, to prevent, or detect and correct, <br /> noncompliance with a type of compliance requirement of a federal <br /> program on a timely basis. A material weakness in internal control <br /> over compliance is a deficiency, or combination of deficiencies, in <br /> internal control over compliance, such that there is a reasonable <br /> possibility that material noncompliance with a type of compliance <br /> requirement of a federal program will not be prevented, or detected <br /> and corrected, on a timely basis. A significant deficiency in <br /> internal control over compliance is a deficiency, or a combination of <br /> deficiencies, in internal control over compliance with a type of <br /> compliance requirement of a federal program that is less severe than <br /> a material weakness in internal control over compliance, yet <br /> important enough to merit attention by those charged with governance. <br /> -47- <br /> Simmons, Richey <br /> & Company, P.C. <br /> Certified Public Accountants <br />