RKO - Runyon Kersteen Ouellette Letter
2023 Audit · 12 pages · 1,653 words · all documents · the town's PDF →
Certified Public Accountants and Business Consultants
September 9, 2024 To the Board of Selectmen Town of Durham, Maine
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Durham, Maine for the year ended December 31, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our discussion with the Board Chair on February 12, 2024. Professional standards also require that we communicate to you the following information related to our audit.
Our Responsibilities under U.S. Generally Accepted Auditing Standards and Government Auditing Standards
As stated in our engagement letter dated February 12, 2024, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities.
As part of our audit, we considered the system of internal control of the Town of Durham, Maine. Such considerations are solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we also performed tests of the Town of Durham, Maine’s compliance with certain provisions of laws, regulations, contracts, and grants. However, providing an opinion on compliance with those provisions was not an objective of our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Town of Durham, Maine are described in the notes to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2023. We noted no transactions entered into by the Town of Durham, Maine 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.
Board of Selectmen
Page 2
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 financial statements were:
• Management’s estimate of depreciation expense, which is based on estimated useful lives of assets.
• Management’s estimate of unavailable tax revenue, which is based on estimated tax collections.
• Management’s estimates of the net pension and OPEB liabilities and related expense, which are based on actuarial reports.
We evaluated the methods, assumptions, and data 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 financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
During the year, the Town experienced turnover in staff and transitioned its accounting function to a third party. The turnover and changes in procedures created delays in obtaining certain audit documentation.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. See the attached “Adjusting Journal Entries” which reports misstatements detected as a result of audit procedures and corrected by management, some of which were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
The attached “Passed Adjustments” schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The uncorrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in our judgment, such uncorrected misstatements are immaterial to the financial statements under audit.
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.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated September 9, 2024.
Board of Selectmen
Page 3
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 the Town’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 Town’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the schedules related to the net pension and OPEB liabilities, 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 individual fund financial statements, including the detailed budgetary comparison, 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 information and use of the Board of Selectmen serving as audit committee and management of the Town of Durham, Maine and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours,
Town of Durham Adjusting Journal Entries 12/31/2023
Account Description Debit Credit 001 To record change in Rescue Receivables for year-end. AA-1-00-1200 Accounts Receivable 14,801.96 0.00 AA-6-14-6470 Charges for Services-Ambulance Fees 0.00 14,801.96 Total 14,801.96 14,801.96 002 To remove invalid A/P invoice found during testing - TRIO for 2024. AA-7-20-7356 Administration-Software Licenses 0.00 22,990.06 AA-3-00-3000 Accounts Payable 22,990.06 0.00 Total 22,990.06 22,990.06 003 To bring on old RE Taxes Receivables (1993-2003). AA-1-00-1250 RE Taxes Receivable 15,450.83 0.00 AA-6-19-6999 Other Revenue-Miscellaneous Revenue 0.00 15,450.83 Total 15,450.83 15,450.83
004
To record retainage for FY 2023.
HD-7-40-7720 Public Works Cap-Public Works-Infrastructure 14,072.50 0.00 HD-3-00-3000 Accounts Payable 0.00 14,072.50 Total 14,072.50 14,072.50 005 To adjust unearned revenue to actual at year end. AA-4-00-4500 Unavailable Property Taxes 0.00 40,500.00 AA-6-10-6000 Property Taxes-Property Taxes 40,500.00 0.00
Total 40,500.00 40,500.00
Account Description Debit Credit
006
To reverse PY A/R and bring on CY plus A/R found in search.
AA-6-19-6999 Other Revenue-Miscellaneous Revenue 0.00 9,690.84
AA-6-11-6105 Excise Taxes-Other Excise 0.00 2,032.34
AA-6-10-6000 Property Taxes-Property Taxes 0.00 33.37
AA-1-00-1200 Accounts Receivable 11,756.55 0.00
AA-6-13-6399 Intergovernmental-Miscellaneous 0.00 56,633.13
AA-1-00-1200 Accounts Receivable 56,633.13 0.00
AA-1-00-1200 Accounts Receivable 0.00 80,800.60
AA-6-13-6305 Intergovernmental-Homestead Exemption 80,800.60 0.00
Total 149,190.28 149,190.28
007
To record accrued PR for year end.
AA-7-20-7000 Administration-Department Head Wages 2,119.23 0.00
AA-7-20-7015 Administration-Full Time Staff Wages 1,480.64 0.00
AA-7-20-7020 Administration-Part Time Staff Wages 674.50 0.00
AA-7-20-7030 Administration-Elected Official Wages 860.00 0.00
AA-7-20-7050 Administration-Payroll Taxes 470.67 0.00
AA-7-21-7020 Municipal Buildings-Part Time Staff Wages 82.50 0.00
AA-7-21-7050 Municipal Buildings-Payroll Taxes 6.31 0.00
Planning and Code Enf-Department Head
AA-7-27-7000 Wages 1,106.70 0.00
AA-7-27-7050 Planning and Code Enf-Payroll Taxes 415.97 0.00
AA-7-30-7000 Fire Department-Department Head Wages 1,594.00 0.00
AA-7-30-7020 Fire Department-Part Time Staff Wages 2,965.76 0.00
AA-7-30-7050 Fire Department-Payroll Taxes 391.86 0.00
AA-7-40-7000 Public Works-Department Head Wages 1,413.20 0.00
AA-7-40-7015 Public Works-Full Time Staff Wages 4,593.20 0.00
AA-7-40-7020 Public Works-Part Time Staff Wages 418.53 0.00
AA-7-40-7050 Public Works-Payroll Taxes 653.68 0.00
AA-3-00-3200 Accrued Payroll 0.00 19,246.75Total 19,246.75 19,246.75
Town of Durham Passed Adjustments 12/31/2023
Account Description Debit Credit 200 To post back to 2022 invoices for curbside trash and recycling. AA-7-42-7231 Solid Waste-Hauling 0.00 3,383.87 AA-7-42-7231 Solid Waste-Hauling 0.00 18,952.17 AA-5-00-5400 Unassigned Fund Balance 22,336.04 0.00 Total 22,336.04 22,336.04 201 To record a right-to-use asset and liability, with first year amortization and interest expenses for a copier lease. Entity-wide capital assets Right-to-use asset 9,953.40 0.00 Entity-wide liabilities Lease liability 0.00 9,953.40 Entity-wide expenses Amortization expense 281.59 0.00 Entity-wide expenses Interest expense 234.78 0.00 Entity-wide expenses Rental expense 0.00 1,924.32 Entity-wide capital assets Accumulated amortization 281.59 Entity-wide liabilities 1,689.54 0.00
Total 12,159.31 12,159.31
Source: durham-2023-sas-letter.pdf on durhammaine.gov. Text extracted with pdftotext; no wording has been corrected.