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Board of Directors <br />December 30, 2008 <br />Page 2 <br />PRIOR YEAR DISCLOSURES <br />Outstandin Checks <br />During our prior audit, we noted that there were outstanding checks on the Texas Bank & Trust and <br />Chase Bank accounts that have been outstanding for some time. We recommended that the lists of <br />outstanding checks be reviewed regularly and that all checks not returned by the banks within a <br />reasonable period of time be investigated. <br />The Council addressed this condition during the current year under audit and closed the subj ect bank <br />accounts. <br />Adjustin Entries <br />During our prior year audit, we made adjusting journal entries totaling $16,577 that were necessary <br />to correct the financial statements. The amount included an adjustment for depreciation, as well as <br />adjustments to grant receivables and accounts payable. We recommended that management develop <br />a system to analyze and adjust these accounts prior to the start of the audit. <br />Similar conditions were observed during the current year audit. We have discussed this situation <br />with management and recommend they implement the procedures they have developed. <br />CURRENT YEAR DISCLOSURES <br />Grant Reporting <br />The Council prepares and submits f nancial status reports to grantor agencies monthly. The amounts <br />reported should be supported by the Council's underlying accounting records. During our audit, we <br />summarized monthly amounts reported to the grantor agencies and compared the total amounts to <br />the year-end accounting records. We noted differences on the five grants tested; however there was <br />no indication of claims for reimbursement in excess of eligible expenses. <br />We have discussed this matter with management and have been advised that reconciliation <br />procedures were developed and put into practice during September, 2008, to address this coiidition. <br />This report is intended solely for the use of management and should not be used for any other <br />purpose. We appreciate the cooperation and courtesy extended to us by the Council's personnel <br />during our engagement. We will be pleased to discuss the comments and recommendations in this <br />letter with you at any time. <br />L~Jxj,jt, 4 <br />do.k <br />Karen A. Jacks & Associates, P.C. <br />Ia 000091 <br />