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HomeMy WebLinkAboutWeaver Tidwell documents weaver TC 3/2/15 February 17, 2015 To the Honorable Mayor, Town Council and Town Manager Town of Westlake We have audited the financial statements of the Town of Westlake (the Town) as of and for the year ended September 30, 2014, and have issued our report thereon dated February 17, 2015. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated August 15, 2014, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. As part of our audit, we have considered the internal control of the Town. Such considerations are solely for the purpose of determining our audit procedures and not to provide any assurance concerning such control. As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of the Town's compliance with certain provisions of laws, regulations, contracts and grants. However, the objective of tests was not to provide an opinion on compliance with such provisions. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the Town solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. AN INDEPENDENT WEAVER AND TIDWELL LLP DALLAS MEMBER OF BAKER TILLY CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 12221 MERIT DRIVE,SUITE 1400,DALLAS,TX 75251 INTERNATIONAL WWW.WEAVERLLP.COM P:(972)490 1970 F:(972)702 8321 Town of Westlake February 17, 2015 Page 2 Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence. Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the Town is included in the Note 1 to the financial statements. During fiscal year 2014, the Town implemented GASB Statement No. 65, "Items Previously Reported as Assets and Liabilities." As a result, bond issuance costs are no longer reported as an asset and amortized over the life of the debt in the government-wide financial statements. Accordingly, the beginning net position of the Town's governmental activities has been reduced by $647,443 to reflect this change. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on 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 markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are: • Management's estimates of useful lives in calculating depreciation on capital assets - We evaluated the key factors and assumptions used to develop the estimates in determining that they are reasonable. • Management's estimate of uncollectible receivables - We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable. • Management's estimate relating to the recognition of school foundation revenue - The estimate was based on the most up-to-date information available. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole. Town of Westlake February 17, 2015 Page 3 Financial Statement Disclosures The financial statement disclosures are neutral, consistent and clear. Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. There were no significant adjustments made to the financial statements as a result of our audit procedures. The attached schedule summarizes uncorrected financial statement misstatements whose effects in the current and prior periods, as determined by management, are immaterial both individually and in the aggregate, to the financial statements taken as a whole and each applicable opinion unit. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the Town's financial statements or the auditor's report. Management was not in agreement with our assessment of the proper accounting treatment of the accrual of state foundation revenue. The Academy has historically recorded a portion of the subsequent school year's allotment corresponding with the number of school days in August relating to the subsequent school year. Additionally, there continues to be a number of schools that have continued this practice and TEA has allowed the practice to continue. In our opinion, GASB Statement No. 33 precludes schools from accruing state foundation funds. Representations Requested from Management We have requested certain written representations from management, which are included in the management representation letter dated February 17, 2015. Town of Westlake February 17, 2015 Page 4 Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Information in Documents Containing Audited Financial Statements Pursuant to professional standards, our responsibility as auditors for other information in documents containing the Town's audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have provided an "in relation to" opinion on supplementary information accompanying the financial statements. We performed limited procedures on the MD&A and RSI. We did not provide any assurance on this information, however. Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements. This report is intended solely for the information and use of the Town Council and management of the Town and is not intended to be and should not be used by anyone other than these specified parties Yours truly, WEAVER AND TIDWELL, L.L.P. Town of Westlake February 17, 2015 Page 5 Uncorrected Misstatements: Account Descrijo • 1,ProposedJE# 3001 PP AJE to remove accrual of State Foundatio`6 and Per Capita Aid 199003600 Unresery ed/Undesignated/Unassigned Fund Balance 214,666.00 199005811 Per Capita Apportionment 3,803.00 199005812 Foundation School Program Act Entitlements 10,739.00 199001241 Due from State 229,208.00 Total 229,208.00 229,208.00 � ' ^ weaver INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF .FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Mayor and Members of the Town Council Town of Westlake, Texas We have oudited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the [JoFnotnoUe[ General of the United Stmte8, the financial statements of the governmental aotivities, the business-type uctiviUeo, the aggregate discretely presented component unite, each major fund and the aggregate remaining fund information of the Town of VVea[|ake. Texas (the Town), as of and for the year ended September 30. 2014. and the related notes to the financial statements, which collectively comprise the Town's basic financial statements, and have issued our report thereon dated February 17. 3014. Internal Control Over Financial Reporting In planning and performing our audit Of the financial statemnente, we considered the Town's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial ototanoenta. but not for the purpose of expressing an opinion on the effectiveness of the Town's internal control. Accordingly, we do not express an opinion on the effectiveness of the Town's internal control. A deficiency in internal control exists when the design or operation of o control does not allow management or enop|oyees, in the normal course of performing their assigned functionn, to prevent, or detect and oorreot, misstatements on a Urne|y basis. A material weakness is o defioiency, or m combination of deficiencies, in internal oont[o|, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevonted, or detected and corrected on e timely basis. A significant deficiency is o deficiency, or e oonnbineUmD of deficienoie8, in internal control that is |eeo severe than o material vvamknaea, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these |inoitatione, during our audit we did not identify any deficiencies in internal control that we consider to be material vvemkneeoaa. Huvvever, material vveakOeaaaa may exist that have not been identified. Compliance and Other N9mttema As part of obtaining reasonable assurance about whether the Town's financial statements one free from material nniestotannent, we performed tests of its compliance with certain provisions of |avvo, regu|odona, contracts, and grant agneennanta, noncompliance with which could have m direct and material effect on the determination of financial statement amounts. AN INDEPENDENT WEAVER AND nowcLiup DALLAS MEMBER 0F BAKER T|LLY CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 12221 MERIT DRIVE,SUITE|4oV'DALLAS,Tx/5zm |wrcnNxTNmAL nWW.nc/wERLL00M P.(972)490 1970 r.(9/2)70202/ Town of Westlake, Texas Page 2 However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Town's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. WEAVER AND TIDWELL, L.L.P. February 17, 2014