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Village of Mayfield September 11, 2009 Page 4 When transaction processing is complex and the volume of transactions is relatively high, obtaining and reviewing a service organization auditor's Report on Controls Placed in Operation and Tests of Operating Effectiveness may be the most effective method of ineeting your responsibility to monitor a service organization, and may also be the only efficient means by which we can obtain sufficient evidence regarding their internal controls. Statement on Auditing Standards No. 70 (SAS 70) discusses the aforementioned report. (In some circumstances, we can accept a suitably-designed agreed-upon procedures report (AUP) in lieu of a SAS 70 report.) Our staff can discuss SAS 70 and possible monitoring controls you might use with you. ?You are responsible for mforming ourstaff of fhe service organ?zatrons your :: K go??ernmen# uses, ?anrl t'or mon?fonn;g fhese,serv?ce organrzatrons' performance - ' ? . ... ._,<. r_ _ .... ?_ . t . . , . . ., -. a_ Service organizations of which we are aware are: • Regional Income Tax Association, which processes your Village's Income Tax Collection. Please confirm to us that, to the best of your knowledge, the above listing is complete. Representations from Management Your Responsibilities At the conclusion of the engagement, the Village's management will provide to us a representation letter that, among other things, will confirm, to the best of their knowledge and belief: • ManagemenYs responsibility for preparing the financial statements in conformity with the Village's accounting basis; • The availability of original financial records and related data, the completeness and availability of all minutes of the legislative or other bodies and committee meetings; • Management's responsibility for the entity's compliance with laws and regulations; • The identification and disclosure to the auditor of all laws, regulations, and provisions of contracts and grant agreements directly and materially affecting the determination of financial statement amounts and; • The absence of fraud involving management or employees with significant roles in internal control. Additionally, we will request representations, as applicable, regarding: • The inclusion of all component units, and the disclosure of all joint ventures and other related organizations; m The proper classification of funds; • The proper approval of reserves of fund equity; • Compliance with laws, regulations, and provisions of contracts and grant agreements, including budget laws or ordinances; compliance with any tax or debt limits, and any debt covenants; • Representations relative to GASB-required supplementary information; • The identification of all federal assistance programs, and compliance with grant requirements. • Events occurring subsequent to the fiscal year end requiring adjustment to or disclosure in the financial statements or federal awards expenditure schedule. Management is responsible for adjusting the financial statements to correct misstatements we may detect during our audit and for affirming to us in the representation letter that the effects of any uncorrected misstatements we aggregate during our engagement and pertaining to the latest period the statements present are immaterial, both individually and in the aggregate, to the opinion units (Financial statements include the related footnotes and required and other supplemental information).