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Home My WebLink AboutAudit memoV"4 nl!� I PATTILLO, BROWN & HILL,L.L.P. CERTIFIED PUBLIC ACCOUNTANTS 9 BUSINESS CONSULTANTS To the Honorable Mayor and Town Council Town of Westlake, Texas We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate discretely presented component units of Town of Westlake, Texas as of and for the year ended September 30, 2010 and have issued our report thereon dated February 22, 2011. Professional standards require that we provide you with the following information related to our audit. Government As stated in our engagement letter dated July 6, 2010, 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. 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 Town of Westlake, Texas are described in Note I to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2010. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred. 115 SOUTH CHURCH STREET 0 HILLSBORO, TX 76645 E (254) 582 -2583 E FAX: (254) 582 -5731 ,,vww.pbhcpa.com AFFILIATE OFFICES: BROWNSVILLE, TX (956) 544 -7778 ® TEMPLE, TX (254) 791 -3460 WACO, TX (254) 772 -4901 ® ALBUQUERQUE, NM (505) 266 -5904 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 fixture 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 estimate affecting the financial statements include management's estimate of accumulated depreciation. 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. 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. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as 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 February 22, 2011. 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 governmental unit's financial statements or a determination of the type of auditors' opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to deterinine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. N 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. This information is intended solely for the use of the Town Council and management of Town of Westlake, Texas and is not intended to be and should not be used by anyone other than these specified parties. PA-A, 8,M„ , )4�G' 11.1' February 22, 2011 K Client: 75041 - Town of Westlake Engagement: Westlake - Town of Westlake Period Ending: 913012010 Workpaper: 2930.01 - Adjusting Journal Entries Report Account Description Adjusting Journal Entries JE # 1 Client proposed entry to reconcile Debt Service Transfers in /out 200 - 62580 -99 -00 260- 13070 -00 -00 300 - 52600 -88 -00 200- 20875 -00 -00 260- 62580 -99 -00 300 - 52560 -88 -00 Total Transfer Out to DS Due from 4B Transfer in from PTR 4B Due to PTR Fund Transfer Out to DS Transfer in from 4B Adjusting Journal Entries JE # 2 Client proposed entry to accrue liability for Hadden Landscaping 411 - 43348 -17 -00 A &S Landscaping 411-20201-17-00 Construction Retainage Payable 411 - 20203 -00 -00 Accrued AP Total Adjusting Journal Entries JE # 3 Client proposed entry to reclassify Westlake Academy Foundation cash 100 - 13090 -00 -00 Due from WAF 100 - 10110 -00 -000 Cash -GF 100 Operating Total 341,026.00 341,026.00 341,026.00 1,023,078.00 33, 264.00 33, 264.00 83.00 83.00 2/23/2011 9:42 AM 341,026.00 341,026.00 341,026.00 1, 023, 078.00 3,326.00 29,938.00 33,264.00 Me 83.00 1 of 4 2/23/2011 9:42 AM Client: 7504Y' Town nfWestlake Engagement: Westlake ' Town nfWestlake Period Ending: 913012010 VVorkpapnc 203C\01- Adjusting Journal Entries Report Account Description Debit Credit Adjusting Journal Entries JE# 4 Client proposed entry to adjust Utility Fund PP&E 500-10505'00'00- VVetorTapa - Vaquom 8.532.00 500-16505-00-00- Water Taps 'Fidelity 13.384.00 500-10506-00-00- Waukesha Pearce Generator 10.500.00 500'16000-00-00' IMP-Water Meter Automation 20.849.00 500-34413-16-00 Waste Management 488.00 500-43310-10-00 Boyle &Lowry 165.00 500-47105-18-00 Depreciation Expense 0.859.00 500'47411-16-00 Mechanical Equipment 10.500D0 500'47421-16'00 Water Taps 8.532.00 500-47421-18-00 Water Taps 13.384.00 500-10599-00'00 Accumulated Depreciation 8.859.00 500-10600-00'00- Conot Water Meter Automation 2.583.00 500-16000-00-00- Conut Water Meter Automation 7.985.00 500-16000'00'00' Connt Water Meter Automation 7.891.00 500-10600'00'00' Touhn Water Meter Automation 2.310.00 500-16600'00'00- Const-N1 Sewer Line Xfr |&| Re 105.00 500-20501-00'00 Trashed Billed Liability 488.08 500'25300'00'00 Fund Balance Unreserved 21.904.00 500-34413'16'00 Waste Management 488.00 500-43310'16'00 Boyle &Lowry 185.00 50047105'16'00 Depreciation Expense 8.059.00 500-47411-16-00 Mechanical Equipment 10.500.00 500-47421-16-00 Water Taps 8.532.00 500-47421 -16-00 Water Taps 13384�00 Total 961e300 9619300 Adjusting Journal Entries JE# 5 Client proposed entry to accrue Deloitte revenuelexpense 100-31312-11'000 210-10500-00'00 210~46525-00-00 21046525-00-00 100-10500-00-000 210-20203-00-00 210'20203-00-00 210-31510'00'00 Total Sales Tax Other Sales Tax Receivable ED Do|oitte ED De|oitto Sales Tax Receivable Accrued AP Accrued AP Sales Tax Revenue 61,052.00 61,052.00 61,052.00 132,161.00 315,317.00 81.052.00 61,052.00 132,161.00 Client: 75049 - Town of West lake Engagement: Westlake - Town of Westlake Period Ending: 913012090 Workpaper: 2930.09 - Adjusting Journal Entries Report Account Description Adjusting Journal Entries JE # 6 Client proposed entry to record cost of sold cemetary lots 255 - 49291 -00 -00 Cost Sales Expense -Lots Sold 255 - 49291 -00 -00 Cost Sales Expense - Lots Sold 255 - 15100 -00 -00 Investments- Cemetary Plots 255 - 15100 -00 -00 Investments- Cemetary Plots Total Adjusting Journal Entries JE # 7 Client proposed entry to accrue BCCS invoices 100 - 43260 -12 -000 Building Inspection 100 - 43260 -12 -000 Building Inspection 100 - 20203 -00 -000 Accrued AP Total Adjusting Journal Entries JE # 8 Client proposed entry to reclassify WAF bus contributions 100-47410-11-000 Motor Vehicles 100 - 33700 -11 -00 Private Contributions Total Adjusting Journal Entries JE # 9 Client proposed entry to reclassify Atlas utility credit )- 16600- 00 -00- 00000: IMP -Water Meter Automation 500- 44118 -16 -00 Instrument R &M Total Adjusting Journal Entries JE # 10 Client proposed entry to record amortization and depreciation in the Utility Fund 500 - 47105 -16 -00 Depreciation Expense 500-47110-16-00 Amortization Expense 500 - 16599 -00 -00 Accumulated Depreciation 500- 17002 -00 -00 TRA Amort Total 2/23/2011 9:42 AM I ITM Iff a -•! 199.00 397.00 199.00 397.00 596.00 596.00 1,000.00 1,000.00 2,000.00 2,000.00 2,000.00 83, 250.00 83,250.00 83,250.00 83,250.00 342.00 342.00 342.00 342.00 426,172.00 31,760.00 426,172.00 31,760.00 457,932.00 457,932.00 3 of 4 Client: 75041 - Town of Westlake Engagement: Westlake - Town of Westlake Period Ending: 913012010 Workpaper: 2930.01 - Adjusting Journal Entries Report 500-41770-11-00 Account Description Debit Adjusting Journal Entries JE # 11 Compensated Absences Expense Client proposed entry to reclass N1 Sewer line transfer to expense 500- 41770 -18 -00 500 - 43215 -16 -00 Engineering 4,120.00 500 - 46195 -16 -00 Construction Expense 7,959.00 500- 46195 -16 -00 Construction Expense 19,637.00 i- 16600- 00 -00- 00000E Engrng - TRA/SL N1 Sewer 1- 16600- 00- 00- 00003C Const-N1 Sewer Line Transfer Compensated Absences Liability - Short -term 1- 16600- 00 -00- 000031 Const -N1 Sewer Line Xfr I &I Re Total Total 31,716.00 Adjusting Journal Entries JE # 12 Client proposed entry to record compensated absences in the Utility Fund 100 - 10110 -00 -000 Cash -GF 100 Operating 500-41770-11-00 Compensated Absences Expense 4,037.00 500 - 41770 -16 -00 Compensated Absences Expense 3,602.00 500- 41770 -18 -00 Compensated Absences Expense 1,808.00 500-41770-21-00 Compensated Absences Expense 357.00 500 - 22733 -00 -00 Compensated Absences Liability - Long -term 500- 22734 -00 -00 Compensated Absences Liability - Short -term Total 9,804.00 Adjusting Journal Entries JE # 13 Client proposed entry to record Marriott invoices not received until January 2011 220 - 43530 -11 -00 Marriott Mktg /Transportation 14,000.00 220 - 43530 -11 -00 Marriott Mktg /Transportation 14,000.00 220 - 20203 -00 -00 Accrued AP Total 28,000.00 Adjusting Journal Entries JE # 14 Client proposed entry to accrue Marriott Incentive invoice not recevied until 1/25/11 220 - 43530 -11 -00 Marriott Mktg /Transportation 5,000.00 220- 20203 -00 -00 Accrued AP Total 5,000.00 Adjusting Journal Entries JE # 15 Client proposed entry to record receivable from the Foundation to cover what would have resulted in a negative fund balance in fund 411 & what 100 - 10110 -00 -000 Cash -GF 100 Operating 16,896.00 411 - 13090 -00 -00 Receivable from Foundation 79,930.00 411 - 20810 -00 -00 Due to General Fund 16,896.00 100 - 13121 -00 -000 Due from A &S Bldg Fund 411 - 10110 -00 -00 Cash -A &S 411 Operating 411- 33700 -00 -00 Contributions Total 113,722.00 2/23/2011 9:42 AM 4,120.00 7,959.00 19,637.00 31,71 6.00 8,824.00 980.00 9,804.00 28,000.00 28,000.00 5,000.00 5,000.00 16, 896.00 16, 896.00 79,930.00 113,722.00 4of4