SWCSR FINANCIAL REPORT 12-31-2007

Home Browse Search

Lars•nA11en CPAs, Consultants & Advisors www.larsonallen.com Board of Directors Sherburne-Wright County Cable Communications Commission II Buffalo,Minnesota In planning and performing our audit of the financial statements of the Sherburne-Wright County Cable Communications Commission II as of and for the year ended December 31, 2007, in accordance with auditing standards generally accepted in the United States of America, we considered Sherburne-Wright County Cable Communications Commission II's (the Commission) internal control over financial reporting(internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission's internal control. Accordingly, we do not express an opinion on the effectiveness of the Commission's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. However, as discussed below, we noted certain deficiencies in internal control that we consider to be significant deficiencies and material weaknesses. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions,to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the organization's internal control. We believe that the following deficiencies constitute material weaknesses: Un-reconciled Bank Accounts Bank reconciliations should be performed shortly after receiving the month's bank statement to assist Management in their responsibilities for detecting errors, misstatements, or fraud in a timely manner. The Commission's checking account was not reconciled until after the end of the fiscal year; as a result we identified adjusting entries which increased cash fund balance at December 31, 2007 by approximately $2,500. The Commission should implement procedures to prepare bank reconciliations on a timely basis. Limited Segregation of Duties The treasurer has the primary responsibility for virtually all of the accounting and financial duties. As a result, many of those aspects of internal accounting control which rely upon an adequate segregation of duties are,for all practical purposes, not available in this staffing scenario. We recognize that the Commission's cost;benefit analysis has concluded that additional persons for the purpose of segregating duties is not practicable, but we are required, under our professional responsibilities, to call the situation to your attention. The Commission should utilize Board oversight of cash reconciling as well as the receipts and disbursements process to the maximum extent possible to mitigate the absence of segregation of duties. ("yi�w9 LarsonAllen LLP is a member of Nexia International,a worldwide:network of independent accounting and consulting firms. INTENNATIONAL