03-10-1993 Council Agenda - Laserfiche WebLink

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Little Canada Firemen's Relief Association Internal Control Structure Page 2 We noted one matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgement, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the combined and individual fund financial statements. Our consideration of the internal control structure disclosed the following condition that we believe to be a reportable condition at December 31, 1992. Substantially all accounting procedures are performed by one person (the Treasurer). Ideal conditions call for segregation of duties to establish a system of internal testing of procedures performed. Certain other safeguards are established to compensate for this situation (such as the President and the Treasurer signing all checks and the Board's approval of all disbursements of the Relief Association, etc.). These conditions are common to organizations of this size. Any modification of internal controls in these areas must be viewed from a cost/benefit perspective. A material weakness is a reportable condition in which the design or operation of the specific internal control structure elements does not reduce to a relatively low level, the risk that errors or irregularities in amounts that would be material in relation to the combined and individual fund financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe none of the reportable conditions described above is a material weakness. This report is intended for the information of the Little Canada Firemen's Relief Association. This restriction is not intended to limit the distribution of this report, which is a matter of public record. Respectfully submitted, TAUTGES, REDPATH & CO., LTD. Certified Public Accountants January 25, 1993 Page 24