To The Herald-Whig:

I would like to thank Mr. Bastean and his friends for 1) proving the point that I made in my previous letter and 2) giving me the opportunity to explain the differences in an auditor's terminology.

On a scale of 1 to 10, with 10 being the worst, the report cited rates about a 3 -- not perfect, but not terrible, either. I've seen better and, quite frankly, I've issued much worse reports.

Governmental units the size of Quincy Public Schools, will have three letters issued -- an opinion on the financial statements, a report on internal controls over financial reporting and compliance with laws and regulations (in accordance with Government Auditing Standards) and a report on internal controls and compliance over major federal programs (in accordance with the Single Audit Act).

Within these letters, there are various levels of assurance. In this particular case, the auditor's opinion on the financial statements themselves was a "clean" or "unqualified" opinion -- meaning that the District's statements contained no material misstatements.

Even with a clean opinion, however, it is not unusual to find individual items that need correction or attention -- a reportable condition. As Mr. Bastean so eloquently quoted from the auditor's letter, a reportable condition is a condition that, if not corrected, can cause serious problems later on.

Had the issue been more serious, the auditor would have reported the condition as a "material weakness" in internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material misstatement or non-compliance with a law or regulation could occur and not be detected in a timely manner.

The auditor could also go so far as to issue a "qualified" or "adverse" opinion on the internal controls as well. This was clearly not the case with the District. The fact that the issues were corrected and not reported as a repeat finding the following year would indicate that the matter was resolved, as auditors are required to follow up on previously reported findings.

An independent CPA firm conducting an audit has no "motives," but rather follows a code of professional ethics. Rigorous training standards and licensing requirements are what sets a Certified Public Accountant apart from the "self-trained." Continuing education, peer review and regulation exist to give the public assurance that audits are conducted in a fair and impartial manner.

Dennis G. Koch CGFM

Certified Public Accountant

Quincy