A.L. Philpott Manufacturing Extension Partnership report on Audit for ...

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August 7, 2013The Honorable Robert F. McDonnellGovernor of VirginiaThe Honorable John M. O’Bannon, IIIChairman, Joint Legislative Auditand Review CommissionWe have audited the financial records and operations of the A.L. <strong>Philpott</strong> <strong>Manufacturing</strong> <strong>Extension</strong><strong>Partnership</strong> (<strong>Partnership</strong>) for the years ended June 30, 2010, 2011, and 2012. We conducted thisperformance audit in accordance with generally accepted government auditing standards. Those standardsrequire that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonablebasis for our findings and conclusions based on our audit objectives. We believe that the evidence obtainedprovides a reasonable basis for our findings and conclusions based on our audit objectives.Audit ObjectivesOur audit’s primary objectives were to evaluate the accuracy of recorded financial transactions in theCommonwealth Accounting and Reporting System and <strong>Partnership</strong>’s accounting system, review the adequacyof the <strong>Partnership</strong>’s internal controls, and test compliance with applicable laws, regulations, contracts, andgrant agreements.Audit Scope and MethodologyThe <strong>Partnership</strong>’s management has responsibility for establishing and maintaining internal controland complying with applicable laws and regulations. Internal control is a process designed to providereasonable, but not absolute, assurance regarding the reliability of financial <strong>report</strong>ing, effectiveness andefficiency of operations, and compliance with applicable laws, regulations, contracts, and grant agreements.We gained an understanding of the overall internal controls, both automated and manual, sufficient toplan the audit. We considered significance and risk in determining the nature and extent of our auditprocedures. Our review encompassed controls over the following significant cycles, classes of transactions,and account balances:3
Federal grant revenues and expensesContractual services expensesPayroll expensesSmall purchase charge card transactionsAppropriationsCash receipting and collection of accounts receivableWe performed audit tests to determine whether the <strong>Partnership</strong>’s controls were adequate, had beenplaced in operation, and were being followed. Our audit also included tests of compliance with provisions ofapplicable laws, regulations, contracts, and grant agreements. Our audit procedures included inquiries ofappropriate personnel, inspection of documents, records, and contracts, and observation of the <strong>Partnership</strong>’soperations. We tested transactions and performed analytical procedures, including trend analyses.ConclusionsWe found that the <strong>Partnership</strong> properly stated, in all material respects, the amounts recorded and<strong>report</strong>ed in the Commonwealth Accounting and Reporting System and the <strong>Partnership</strong>’s accounting system.The <strong>Partnership</strong> records its financial transactions on the cash basis of accounting, which is a comprehensivebasis of accounting other than accounting principles generally accepted in the United States of America. Thefinancial information presented in this <strong>report</strong> came directly from A.L. <strong>Philpott</strong>’s accounting records asrecorded in the PeopleSoft Administrative Information System (AIS).We noted no matters involving internal control and its operation that we consider necessary to be<strong>report</strong>ed to management. The results of our tests of compliance with applicable laws, regulations, contracts,and grant agreements disclosed no instances of noncompliance or other matters that are required to be<strong>report</strong>ed under Government Auditing Standards.Exit Conference and Report DistributionWe discussed this <strong>report</strong> with management on August 21, 2013.This <strong>report</strong> is intended for the information and use of the Governor and General Assembly,management, and the citizens of the Commonwealth of Virginia and is a public record.EMS/cljAUDITOR OF PUBLIC ACCOUNTS4
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A.L. Philpott Manufacturing Extension Partnership report on Audit for ...

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