COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE AT THE CONCLUSION OF THE AUDIT
Board of Education
West Genesee Central School District
Camillus, New York
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of West Genesee Central School District (the School District) for the year ended June 30, 2018. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated August 1, 2018. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the School District are described in Note 1 to the financial statements. During the year ending June 30, 2018, the School District adopted Government Accounting Standards Board (GASB) Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefit Other than Pensions.” Other than the adoption of GASB Statement No. 75, no new accounting policies were adopted and the application of existing policies was not changed during 2018. We noted no transactions entered into by the School District during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the School District’s financial statements were: depreciation expense, pension obligations, other postemployment benefits obligations, and compensated absences.
Management’s estimates of depreciation expense, pension obligations, other postemployment benefits obligations, and compensated absences are based on various assumptions. Depreciation expense estimates are based on the historical cost of assets and their estimated useful lives, pension obligations are based on the School District’s proportionate share of the NYS Retirement System Plan (asset) liability, and other postemployment benefits obligation estimates are based on actuarial calculations. The compensated absences estimate, which includes accrued sick time, is based on hours accrued and pay rates. We evaluated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures were:
The disclosures of capital assets, short-term debt, long-term debt, pension obligations, other postemployment benefit liability, fund balance, and restatement, the details of which are presented in Notes 6, 7, 8, 10, 11, 13, 14, and 17 of the financial statements.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. There were no misstatements, other than those that are trivial, detected as a result of audit procedures.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
We have requested certain representations from management that are included in the management representation letter dated September 28, 2018.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to School District’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
We applied certain limited procedures to Management’s Discussion and Analysis, budgetary comparison information, the Schedules of School District’s Contributions – NYSLRS and NYSTRS Pension Plans, the Schedules of the School District’s Proportionate Share of the Net Pension (Asset) Liability, and the Schedule of Changes in the School District’s Total OPEB Liability and Related Ratios, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the Schedules of Change from Adopted Budget to Final Budget and the Real Property Tax Limit, Schedule of Project Expenditures – Capital Projects Fund, Schedule of Net Investment in Capital Assets, and the Schedule of Expenditures of Federal Awards, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Restriction on Use
This information is intended solely for the use of the Audit Committee, the Board of Education, and management of the West Genesee Central School District, and is not intended to be, and should not be, used by anyone other than these specified parties.
Insero & Co. CPAs, LLP Certified Public Accountants
Ithaca, New York September 28, 2018
Insero & Co. CPAs, LLP
Rochester | Ithaca | Corning | Cortland | Watkins Glen | (800) 232-9547 | www.inserocpa.com
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