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Home My WebLink About2020 Communication LetterTOWN OF ITHACA COMMUNICATION WITH MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE YEAR ENDED DECEMBER 31, 2020 410 East Upland Road Ithaca, New York 14850 607-272-5550 / 607-273-6357 (Fax)www.swcllp.com October 28, 2021 To the Supervisor and Town Board Town of Ithaca Ithaca, NY 14850 We have audited the financial statements of the governmental activities, the business‐type activities, each major fund, and the aggregate remaining fund information of the Town of Ithaca for the year ended December 31, 2020, and have issued our report thereon dated October 28, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and government auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you, dated March 17, 2021. Professional standards also require that we communicate to you certain information related to our audit. This information is intended solely for the use of the Supervisor, Town Board and management of the Town of Ithaca and is not intended to be and should not be used by anyone other than these specified parties. Sincerely, Sciarabba Walker & Co LLP TABLE OF CONTENTS Qualitative Aspects of Accounting Practices ................................................................................................ 3 Accounting Policies............................................................................................................................... 3 Significant Estimates ............................................................................................................................ 3 Note Disclosures ................................................................................................................................... 3 Corrected and Uncorrected Misstatements ................................................................................................. 3 Other Required Communications ................................................................................................................. 4 Difficulties Encountered in Performing the Audit ................................................................................ 4 Disagreements with Management ....................................................................................................... 4 Management Representations ............................................................................................................. 4 Management Consultations with Other Independent Accountants .................................................... 4 Other Audit Findings or Issues ............................................................................................................. 4 Other Matters ................................................................................................................................... 4‐5 Internal Control Communications ................................................................................................................. 5 3 QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES ACCOUNTING POLICIES Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Town of Ithaca are described in Note 1 to the financial statements. As discussed in Note 1U to the financial statements, the Town of Ithaca adopted GASB Statements No. 83, 84, 88, and 90. We noted no transactions entered into by the Town of Ithaca during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. SIGNIFICANT ESTIMATES Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements are:  The estimates of the OPEB liability and OPEB expense under the provisions of Government Accounting Statement No. 75.  The estimate of net pension liability and pension expense under the provisions of Government Accounting Statement No. 68. We evaluated the key factors and assumptions used to develop the estimates in determining that they are reasonable in relation to the financial statements taken as a whole. NOTE DISCLOSURES The financial statement disclosures are neutral, consistent, and clear. CORRECTED AND UNCORRECTED MISSTATEMENTS Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We have not identified any such misstatements. The following entries were not recorded and were not material to the financial statements taken as a whole:  To remove revenue associated with 2019 out of 2020 for permits/licenses: $11,553 decrease in permits/licenses and fund balance. 4 OTHER REQUIRED COMMUNICATIONS DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT We encountered no significant difficulties in dealing with management in performing and completing our audit. DISAGREEMENTS WITH MANAGEMENT For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. MANAGEMENT REPRESENTATIONS We have requested certain representations from management that are included in the management representation letter dated October 28, 2021. MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Commission’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. OTHER AUDIT FINDINGS OR ISSUES We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Commission’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. OTHER MATTERS Our audit engagements include various procedures that may change from year to year. Procedures include performing a risk assessment of the entity and developing a preliminary audit strategy. We considered the firm’s past experience with the Town, the staff, complexity of accounting transactions, the internal accounting policies and procedures, and the industry. This evaluation then led to determining the focus of the audit, based on our assessed risk. We performed additional audit procedures which included sending third party confirmations and comparing them to internal records, applying analytical procedures to balances, vouching deposits to the records and deposit slips, and vouching expenses to the 5 supporting documentation. We also selected a sample of payroll timesheets and tested the related controls over approval and signature. When this process was complete, we prepared the financial statements at the fund level, prepared the conversion workpapers from information gathered during the audit, and prepared the government wide statements. We also updated sections of the Management’s Discussion and Analysis. For 2020 we also performed a single audit in conformity with the Uniform Guidance. In relation to the current year financial statements, we have performed the following non‐attest services:  We have prepared all entries to convert fund financial statements to government‐wide financial statements (GASB 34). Management has accepted the proposed adjustments for the audit ended December 31, 2020. With respect to the required supplementary information, we applied certain limited procedures to the information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. With respect to the supplementary information presented on pages 50‐51, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. INTERNAL CONTROL COMMUNICATIONS Listed below are other internal control matters and recommendations:  During a prior year audit, it was noted that approved vouchers were lacking signature approval of the Town Supervisor. As the Town Supervisor is still required to look at vouchers as part of the Town’s internal control process, we recommended the Town Supervisor begin signing and dating the vouchers to document approval. Status: During our current year audit, we noted the Town began to implement our recommendation during November 2020.