HomeMy Public PortalAboutManagement Letter June 30, 2007 TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 309 2007
R. E . BROWN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
25 CEMETERY STREET — P.O. Box 230
Mendon, Massachusetts 01756
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Phone: (508) 478-3941 Fax: (508) 4784779
To the Honorable Board of Selectmen
Town of Brewster, Massachusetts
In planning and performing our audit of the basic financial statements of the Town of
Brewster, Massachusetts , for the fiscal year ended June 30 , 2007, we considered the
Town ' s internal control in order to determine our auditing procedures for the purpose
of expressing an opinion on the financial statements and not to provide assurance on
internal control .
However, during our audit we became aware of matters that are opportunities for
strengthening internal controls and operating efficiency . The memorandum that
accompanies this letter summarizes our comments and recommendations concerning
those matters .
This letter does not affect our report dated April 10 , 2008 , on the basic financial
statements of the Town of Brewster, Massachusetts .
The accompanying comments and recommendations are intended solely for the
information and use by the management of the Town of Brewster, Massachusetts ,
and are not intended to be used by anyone other than the specified party .
We will review the status of these comments during our next audit engagement. We
have already discussed many of these comments and recommendations with various
Town personnel, and we will be pleased to discuss them in further detail at your
convenience, to perform any additional study of these matters , or to assist you in
implementing the recommendations .
Sincerely ,
,%. L 1 www d eam pa *
April 10 , 2008
TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 30 , 2007
STATUS OF PRIOR YEAR' S FINDING — RESOLVED DURING FY07
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 Department 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 2007
STATUS OF PRIOR YEAR' S FINDING — RESOLUTION IN PROCESS
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 Information Technology Department has budgeted for an online backup solution. The heavily
encrypted data would be uploaded to a secure data center off Cape Cod. Thirty (30) days worth of
different versions of our files will be kept. Implementation will be in FY09 . There is a Cape town
that also utilizes the same software vendor as Brewster. In the event of a disaster, we could use
their worksite. Another alternate location would be in Maynard, MA where the software company
is located.
Currently the system is backed up three times nightly, once to tape and twice on different servers.
We are still storing one copy off site and one in the vault.
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TOWN OF BREWSTER, MASSACHUSETTS
MANAGEMENT LETTER
JUNE 309 2007
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 retained Segal Company, to
perform actuarial consulting services regarding OPEB liabilities under GASB45 for the member
towns .
The preliminary liability has been identified. While Towns are not currently mandated to fund this
liability, the Town of Brewster has set aside $ 1 million of the Stabilization Fund Balance towards
funding GASB45
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