Audit – Management Comment Letter

Printable Version of Audit Management Comment Letter

 

Auditor Letterhead LogoMANGEMENT COMMENT LETTER

Board of Education
West Genesee Central School District
Camillus, New York

In planning and performing our audit of the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the West Genesee Central School District (the School District) as of and for the year ended June 30, 2020, in accordance with auditing standards generally accepted in the United States of America, we considered the School District’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the School District’s internal control.

A deficiency in internal control 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 and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis.

Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. Given these limitations during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

During our audit, we became aware of items for discussion of future matters. This letter summarizes these comments and recommendations regarding these matters. This letter does not affect our report dated September 24, 2020 on the financial statements of the West Genesee School District.

Discussion Items

Impact of Future Standards of the Governmental Accounting Standards Board (GASB)

The School District is in the process of assessing the future effects of each of the following:

  • GASB has issued Statement No. 84, “Fiduciary Activities,” effective for the year ending June 30, 2021. This statement improves guidance regarding identification of fiduciary activities for accounting and reporting purposes.
  • GASB has issued Statement No. 87, “Leases,” effective for the year ending June 30, 2022.
  • GASB has issued Statement No. 89, “Accounting for Interest Cost Incurred Before the End of a Construction Period,” effective for the year ending June 30, 2022.
  • GASB has issued Statement No. 90, “Majority Equity Interests – an Amendment of GASB Statements No. 14 and No. 61,” effective for the year ending June 30, 2021.
  • GASB has issued Statement No. 91, “Conduit Debt Obligations,” effective for the year ending June 30, 2023.
  • GASB has issued Statement No. 92, “Omnibus 2020,” effective for the year ending June 30, 2022.

The School District will evaluate the impact each of these pronouncements may have on its financial statements and will implement them as applicable and when material.

Extraclassroom Policy
As discussed above, the School District will be implementing GASB Statement No. 84, “Fiduciary Activities,” for the year ending June 30, 2021. As such, this statement will have an effect on the School District’s Fiduciary Funds, mainly extraclassroom activities. Under GASB Statement No. 84, the School District will be required to report the extraclassroom activities with the School District’s governmental funds if the School District has administrative involvement in the operation of the extraclassroom activities. For instance, the School District would have administrative involvement if it is approving extraclassroom activity transactions as opposed to advising the students regarding those transactions. We recommend the School District review its existing extraclassroom policy to determine the level of administrative involvement and consider whether extraclassroom activities should be reported as a governmental fund or, alternatively, whether revisions to the policy should be made and the extraclassroom activities continue to be reported in the Agency, now Custodial, Fund as a fiduciary activity.

This communication is intended solely for the information and use of management, the Audit Committee, the Board of Education, and others within the School District, and is not intended to be, and should not be, used by anyone other than these specified parties.

Respectfully Submitted,

Insero & Co. CPAs, LLP Certified Public Accountants

Ithaca, New York

September 24, 2020

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