k. Contract approval - Laserfiche WebLink

i I '" i J I I I I I , I I I I I I 1 I , i, ~_, .0<- National State Auditors Association May 19, 2005 Mr. Robert R. Peterson State Auditor State Capitol Building 600 East Boulevard Bismarck, North Dakota 58505 Dear Mr. Peterson: We have reviewed the system of quality control of North Dakota Office of the State Auditor in effect for the period April 1, 2004 to March 31, 2005 and have issued our report thereon dated May 19, 2005. That report should be read in conjunction with the comments in this letter, which were considered in determining our opinion. Field Work Standards for Financial Audits Findinq - Statements on Auditing Standards Number 99, Consideration of Fraud in a Financial Statement Audit, requires that the auditor should conduct the engagement with a mindset that recognizes the possibility that a material misstatement due to fraud could be present, regardless of any past experience with the entity and regardless of the auditor's belief about management's honesty and integrity . the auditor should not be satisfied with less-than-persuasive evidence because of a belief that management is honest. SAS 99 was effective for audits of financial statements for periods beginning on or after December 15, 2002. Our review found the Division of Local Government Audit did not implement SAS 99 during the period of our review. SAS 99 had been implemented by the Division of State Audit. However, our review found the state CAFR audit documentation did not support that the requirements of the SAS were fully implemented. Recommendation - The North Dakota Office of State Auditor should ensure that the requirements of SAS 99 are fully implemented. Response - The office concurs with this finding and will fully implement SAS 99 for the Division of Local Government Audits and will provide better documentation for the state CAFR audit. Reporting Standards for Financial Audits Findinq - GAGAS reporting standards require the audits use the AICPA standards. The AICPA has issued the State and Local Government Audit Guide with examples of wording for audit reports. North Dakota Office of State Auditor's policies and procedures require the audits to review the latest guidance from the AICPA. The office did not properly implement all the changes made to the "Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, Reportable Instances on Noncompliance, and Other Matters Identified" or for the "Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in :~() I R~gcn..:y Road, Sui[~ 302. Laingwn. K.:ntud\ 4{)~03-291~, Telephone (;(~9! 2~6-11.. -; Fa, (X~\I! 27~-()~()7 -14-1 :->, C;:,pilOl Slreet. :->\\" SUIle 234, \\ ;"hlllgWI1, DC 2(X)O I. Telephone (202) (,2'+"",, I Fa,' 2021624-'-'73 \\'\\\\ .ntlsacl.org