HomeMy Public PortalAboutBrewster 2005 Management Letter TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 30 , 2005
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R. E . BROWN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
P. O . Box 230 - 25 CEMETERY STREET
Mendon , Massachusetts 01756
Phone : (508 ) 478 -3941 Fax : (508 ) 4784779
To the Honorable Board of Selectmen
Town of Brewster, Massachusetts
We have audited the general-purpose financial statements of the Town of Brewster, Massachusetts
for the year ended June 30 , 2005 and have issued our report thereon dated April. 21 , 2006 . As part of
our audit we reviewed and tested the Town of Brewster' s internal control structure . This
management letter is critical in nature and does not identify the strengths of the financial systems .
Internal control structure refers to the method by which the Town safeguards its assets , utilizes the
assets for the purposes intended, insures commitments are made in accordance with Federal , State ,
and local authorizations , records financial transactions accurately and in a timely manner, and
complies with Federal, State and local guidelines, statutes , and by-laws .
The purpose of this management letter is to comment on observed internal control structure
weaknesses noted during the audit field work ; as such, our tests would not necessarily disclose all
weaknesses in the system. We have reviewed the contents of this report with the appropriate
representatives of the Town . We wish to thank the Town of Brewster officials and their staff for
their cooperation while conducting the audit .
We will be pleased to discuss the contents of this report and will be available to assist in
implementing any suggested changes .
This report is intended for the information of the audit committee, management and federal
awarding agencies and pass-through entities . However, this report is a matter of public record and
its distribution is not limited .
Respectfully ,
%. E. 33wwa cam paj
Certified Public Accountants
April 21 , 2006
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TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 30 , 2005
ASSESSORS DEPARTMENT
RECONCILIATION OF WATER AND ROAD BETTERMENTS
Finding
The Assessor ' s department maintains detail accounts for road and water betterments outstanding ,
Periodic reconciliations between the Assessor ' s detail and the Town Accountant' s general ledger
were not performed . ,
Recommendation
We suggest that the Assessor ' s department prepare monthly detail listing of all betterments
receivable and reconcile the list to the Town Accountant's general ledger , The departments should
establish a static variance before any adjustments are proposed to the Town Accountant's general
ledger ,
Management Response
This project will be resolved by FY2007 year end , The Assessing Department is the tax bill
generating office . The Accounting Department will consult with the Assessing Department and
adjust their records accordingly ,
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TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 309 2005
WATER DEPARTMENT
RECONCILIATION OF USER FEES RECEIVABLE
Findings
During our review of the water department, we noted the following :
• Water user charges receivable — The Water and Accounting departments have a policy to
reconcile accounts receivable balances on a monthly basis . While reconciliations did occur,
they were not always performed on a monthly and timely basis .
• A cash register or similar point of sale device is not utilized for accepting payments at the
Water Department. The Water Department collects all water user fees and water service
fees .
Recommendations
The Water and Accounting departments should reconcile the outstanding detail list to the
general ledger on a periodic basis .
• We recommend that a computerized cash register system be installed at the Water
Department. All payments should be processed with the cash (or billing) receipt produced
and provided to the customer.
Management Response
• Reconciliation is performed upon receipt of general ledger spreadsheet material
from the Accounting department . We will contact the Accounting department
immediately if figures do not match or if there are questions/concerns ,
• The Water Department is in the process of writing specifications for an RFP (Bid)
for new billing software . As part of the specifications within the billing software a
computerized cash register is mandatory .
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TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 30 , 2005
AMBULANCE ACCOUNTS RECEIVABLE
Finding
The ambulance receivable system is maintained by Comstar Inc . Currently the receipts are brought
into ambulance revenue on a cash basis . The Town should convert this to a full accounts receivable
system maintained in the general ledger .
Recommendation
The Town should record the ambulance accounts receivable balances on the Town ' s general ledger .
The Town should work with the ambulance billing vendor so that the Town receives the necessary
information to record receivable commitments, cash receipts , abatements due to insurance
agreements and write off of uncollectible accounts . Once established , the Board of Selectmen
should establish a policy to approve any write off of uncollectible accounts .
Management Response
The Accounting Dept has been receiving monthly printouts from Comstar, Inc . , during FY07 . By
FY2007 year end, the receivable will be on the Town ' s books . Current policy has the Fire Chief and
the Board of Selectmen corresponding on billing issues .
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TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 309 2005
DISASTER RECOVERY PLAN
Finding
The Town does not have a disaster recovery plan for financial operations ,
Recommendation
The Town should consider implementing a disaster recovery plan . This plan would coordinate how
the Town business would operate if faced with a major computer failure or natural disaster ,
• Identify critical functions and personnel for continued operations and recovery ,
• Planning for alternative worksites for critical operations ,
• Identify and document manual procedures required in the event of loss of data processing
systems ,
Management Corrective Action Plan
The Town will consult with our Information Technology department and consider a plan, Currently
backups are performed daily via cassette tape , These tapes are kept in the Town vault and
periodically a set is taken off site ,
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TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 30 , 2005
FUTURE CHANGES IN LAW AND ACCOUNTING STANDARDS
OTHER POST EMPLOYMENT BENEFITS
The Government Accounting Standards Board (GASB ) has issued new guidelines for the recording
of post employment benefits . In fiscal year 2009 , the Town will be required to estimate the cost
associated with future benefits of current and retired employees . In most cases , this will be the
future cost of health insurance . The Town will be required to perform an actuarial study every two
years to comply with this accounting standard . In order to comply with this standard, an actuarial
study will have to be performed to calculate the preliminary liability as of July 1 , 2008 .
Management Plan
The Town of Brewster is a member of the Cape Cod Municipal Health Group and the Barnstable
County Retirement System . The Barnstable County Retirement Board has retained Segal Company
to perform actuarial consulting services regarding OPEB liabilities under GASB45 for the member
units .
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