1988-1990-FISCAL AUDITS AND REPORT OF EXAMINATION - MASHPEE INDIAN MUSEUM

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i � I Honorable Selectmen: i The management of the Town of Mashpee, Massachusetts, is respon- sible for establishing and maintaining internal control systems used in administering federal financial assistance programs. 1r► fulfilling that responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in ad- ministering federal financial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is con- sistent with laws, regulations and policies; resources are safeguarded against waste, loss and misuse; and reliable data are obtained, main- tained and fairly disclosed in reports. Because of inherent limitations in any system of internal ac- counting and administrative controls used in administering federal financial assistance programs, errors or irregularities may neverthe- less occur and not be detected. Also, projection of any evaluation of the systems to future periods is subject to the risk that procedures may become inadequate because of changes in conditions, or that the degree of compliance with the procedures may deteriorate. Our study included all the applicable control categories listed above. During the year ended June 30, 1990, the Town of Mashpee, Mas- sachusetts, had no major federal financial assistance programs and ex- pended 65% of its total federal financial assistance under the follow- irig nonmajor federal financial assistance programs: Educationally Deprived Children P.L. 97-35 Chapter 1; National School Lunch Program. With respect to internal control systems used in administering these nonmajor federal financial assistance programs, our study and evalua- tion included considering the types of errors and irregularities that could occur, determining the internal control procedures that should Prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satis- factorily, and evaluating any weaknesses. With respect to the internal control systems used solely in ad- ministering the other nonmajor federal financial assistance programs Of the Town of Mashpee, Massachusetts, our study and evaluation was limited to a preliminary review of the systems to obtain, an under- standing of the control environment and the flow of transactions through the accounting system. Our study and evaluation, of the inter- nal control systems used solely in administering these nonmajor federal financial assistance programs of the Town of Mashpee, Mas- sachusetts, did not extend beyond this preliminary review phase. l! 7