Village of Alsip-SAS 114- 2020
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Alsip, Illinois
As part of our audit of the financial statements of the Village of Alsip (Village) as of and for the year
ended April 30, 2020, we wish to communicate the following to you.
AUDIT SCOPE AND RESULTS
Auditor’s Responsibility Under Auditing Standards Generally Accepted in the United
States of America and the Standards Applicable to Financial Audits Contained in
Government Auditing Standards Issued by the Comptroller General of the United
States
An audit performed in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States is designed to obtain reasonable,
rather than absolute, assurance about the financial statements. In performing auditing procedures,
we establish scopes of audit tests in relation to the opinion unit being audited. Our engagement
does not include a detailed audit of every transaction. Our engagement letter more specifically
describes our responsibilities.
These standards require communication of significant matters related to the financial statement
audit that are relevant to the responsibilities of those charged with governance in overseeing the
financial reporting process. Such matters are communicated in the remainder of this letter or have
previously been communicated during other phases of the audit. The standards do not require the
auditor to design procedures for the purpose of identifying other matters to be communicated with
those charged with governance.
An audit of the financial statements does not relieve management or those charged with governance
of their responsibilities. Our engagement letter more specifically describes your responsibilities.
Qualitative Aspects of Significant Accounting Policies and Practices
Significant Accounting Policies
The Village’s significant accounting policies are described in Note 1 of the audited financial
statements.
Alternative Accounting Treatments
We had no discussions with management regarding alternative accounting treatments within
accounting principles generally accepted in the United States of America for policies and
practices for material items, including recognition, measurement and disclosure considerations
related to the accounting for specific transactions as well as general accounting policies.
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 2
Management Judgments and Accounting Estimates
Accounting estimates are an integral part of financial statement preparation by management,
based on its judgments. The following areas involve significant areas of such estimates for which
we are prepared to discuss management’s estimation process and our procedures for testing the
reasonableness of those estimates:
• Pension and other postemployment benefit costs and liabilities are based on actuarial
assumptions and are subject to uncertainties of future events
• Useful lives of capital assets
• Allowance for uncollectible receivables
Financial Statement Disclosures
The following areas involve particularly sensitive financial statement disclosures for which we
are prepared to discuss the issues involved and related judgments made in formulating those
disclosures:
• Long-term debt obligations of the Village, including future maturities
• Other postemployment benefits and pension benefits under Illinois Municipal Retirement
Fund, Village’s Police Pension Fund and Village’s Firefighter’s Pension Fund
Audit Adjustments
During the course of any audit, an auditor may propose adjustments to financial statement amounts.
Management evaluates our proposals and records those adjustments which, in its judgment, are
required to prevent the financial statements from being materially misstated. A misstatement is a
difference between the amount, classification, presentation or disclosure of a reported financial
statement item and that which is required for the item to be presented fairly in accordance with the
applicable financial reporting framework. Some adjustments proposed were not recorded because
their aggregate effect is not currently material; however, they involve areas in which adjustments in
the future could be material, individually or in the aggregate.
Proposed Audit Adjustments Recorded
• See attached
Proposed Audit Adjustments Not Recorded
• Attached is a summary of uncorrected misstatements we aggregated during the current
engagement and pertaining to the latest period presented that were determined by
management to be immaterial, both individually and in the aggregate, but more than trivial to
the financial statements as a whole.
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 3
Auditor’s Judgments About the Quality of the Village’s Accounting Principles
During the course of the audit, we made the following observations regarding the Village’s
application of accounting principles:
• No matters are reportable.
Difficulties Encountered in Performing the Audit
Our audit requires cooperative effort between management and the audit team. During our audit,
we found significant difficulties in working effectively on the following matters:
• The Village Finance Director position became vacant during our audit, placing an unusually
high demand on the Accountant to perform multiple job functions and address multiple audit
requests that would have been addressed by the Finance Director.
Other Material Communications
Listed below are other material communications between management and us related to the audit:
• Management representation letter (attached)
• We orally communicated to management other deficiencies in internal control identified
during our audit that are not considered material weaknesses or significant deficiencies.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit of the financial statements of the Village of Alsip as of and for the
year ended April 30, 2020, in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, we considered the Village’s internal control over
financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the Village’s internal control. Accordingly, we
do not express an opinion on the effectiveness of the Village’s internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were
not identified. However, as discussed below, we identified certain deficiencies in internal control that we
consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct misstatements on a timely basis.
A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there
is a reasonable possibility that a material misstatement of the Village’s financial statements will not be
prevented or detected and corrected on a timely basis.
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 4
A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is
less severe than a material weakness, yet important enough to merit attention by those charged with
governance.
We observed the following matters that we consider to be material weaknesses and significant
deficiencies.
Material Weaknesses
Refer to the Independent Auditor’s 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.
Significant Deficiencies
Refer to the Independent Auditor’s 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.
Deficiencies
We observed matters that we consider to be deficiencies that we communicated to management
orally.
OTHER MATTERS
Although not considered material weaknesses, significant deficiencies or deficiencies in internal control
over financial reporting, we observed the following matters and offer these comments and suggestions
with respect to matters which came to our attention during the course of the audit of the financial
statements. Our audit procedures are designed primarily to enable us to form opinions on the financial
statements and, therefore, may not bring to light all weaknesses in policies and procedures that may exist.
However, these matters are offered as constructive suggestions for the consideration of management as
part of the ongoing process of modifying and improving financial and administrative practices and
procedures. We can discuss these matters further at your convenience and may provide implementation
assistance for changes or improvements.
Issued Standards Not Yet Adopted
Government Accounting Standards Board (GASB) Statement No. 84, Fiduciary
Activities (GASB 84)
GASB 84 establishes criteria for identifying fiduciary activities. It presents separate criteria for
evaluating component units, pension and other postemployment benefit arrangements and other
fiduciary activities. The focus is on a government controlling the assets of the fiduciary activity
and identification of the beneficiaries of those assets. Fiduciary activities are reported in one of
four types of funds: pension (and other employee benefit) trust funds, investment trust funds,
private-purpose trust funds or custodial funds. Custodial funds are used to report fiduciary
activities that are not held in a trust. The agency fund designation will no longer be used.
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 5
GASB 84 also provides guidance on fiduciary fund statements and timing of recognition of a
liability to beneficiaries.
GASB 84 is effective for financial statements for the Village’s fiscal year ending April 30, 2021.
Earlier application is encouraged.
GASB Statement No. 87, Leases (GASB 87)
In June 2017, GASB published Statement No. 87, Leases. The standard was the result of a
multi-year project to reexamine the accounting and financial reporting for leases. The new
standard establishes a single model for lease accounting based on the principle that leases
represent the financing of the right to use an underlying asset. Specifically, GASB 87 includes
the following accounting guidance for lessees and lessors:
Lessee Accounting - A lessee will recognize a liability measured at the present value of
payments expected to be made for the lease term and an intangible asset measured at the amount
of the initial lease liability, plus any payments made to the lessor at or before the beginning of
the lease and certain indirect costs. A lessee will reduce the liability as payments are made and
recognize an outflow of resources for interest on the liability. The asset will be amortized by
the lessee over the shorter of the lease term or the useful life of the asset.
Lessor Accounting - A lessor will recognize a receivable measured at the present value of the
lease payments expected for the lease term and a deferred inflow of resources measured at the
value of the lease receivable plus any payments received at or prior to the beginning of the lease
that relate to future periods. The lessor will reduce the receivable as payments are received and
recognize an inflow of resources from the deferred inflow of resources in a systematic and
rational manner over the term of the lease. A lessor will not derecognize the asset underlying
the lease. There is an exception for regulated leases for which certain criteria are met, such as
airport-aeronautical agreements.
The lease term used to measure the asset or liability is based on the period in which the lessee has
the noncancelable right to use the underlying asset. The lease term also contemplates any lease
extension or termination option that is reasonably certain of being exercised.
GASB 87 does not apply to leases for intangible assets, biological assets (i.e., timber and living
plants and animals), service concession agreements or leases in which the underlying asset is
financed with conduit debt that is reported by the lessor. Additionally, leases with a maximum
possible term of 12 months or less are excluded.
GASB 87 is effective for financial statements for the Village’s fiscal year ending April 30, 2023.
It is anticipated that leases would be recognized using the facts and circumstances in effect at the
beginning of the period of implementation.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a
Construction Period (GASB 89)
GASB 89 requires financial statements prepared using the economic resources measurement
focus to recognize interest cost incurred before the end of a construction period as an expense in
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 6
the period in which the cost is incurred. Such interest cost will not be capitalized as part of the
historical cost of a capital asset.
It also requires that in financial statements prepared using the current financial resources
measurement focus, interest cost incurred before the end of a construction period is to be
recognized as an expenditure on a basis consistent with governmental fund accounting principles.
GASB 89 is effective for financial statements for the Village’s fiscal year ending April 30, 2022.
Earlier application is encouraged.
GASB Statement No. 90, Majority Equity Interests - an amendment of GASB
Statements No. 14 and No. 61 (GASB 90)
GASB 90 defines a majority equity interest and specifies that a majority equity interest in a
legally separate organization should be reported as an investment if a government’s holding of the
equity interest meets the definition of an investment.
For all other holdings of a majority equity interest in a legally separate organization, a
government should report the legally separate organization as a component unit, and the
government or fund that holds the equity interest should report an asset related to the majority
equity interest using the equity method.
This statement also provides guidance for a component unit in which a government has a 100%
equity interest.
GASB 90 is effective for financial statements for the Village’s fiscal year ending April 30, 2021.
Earlier application is encouraged.
GASB Statement No. 91, Conduit Debt Obligations (GASB 91)
GASB 91 establishes consistent recognition, measurement and disclosure between governments
for conduit debt obligations. The guidance clarifies the existing definition of a conduit debt
obligation, establishes a single method of reporting for issuers and enhances note disclosures.
GASB 91 is effective for financial statements for the Village’s fiscal year ending April 30, 2023.
GASB Statement No. 92, Omnibus 2020 (GASB 92)
GASB 92 addresses practice issues that have been identified during implementation and
application of certain GASB statements. The statement addresses a variety of topics including
issues related to leases, intra-entity transfers, fiduciary activities and fair value disclosures.
GASB 92 is effective for reporting periods based on individual topics discussed therein. Earlier
application is encouraged and is permitted by individual topic to the extent that all requirements
associated with an individual topic are implemented simultaneously.
GASB Statement No. 93, Replacement of Interbank Offered Rates (GASB 93)
GASB 93 addresses the accounting and financial reporting implications that result from the
replacement of an interbank offered rate (IBOR). As a result of global reference rate reform,
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 7
LIBOR is expected to cease to exist in its current form at the end of 2021, prompting
governments to amend or replace financial instruments for the purpose of replacing LIBOR with
other reference rates, by either changing the reference rate or adding or changing fallback
provisions related to the reference rate.
GASB 93 is effective for financial statements for the Village’s fiscal year ending April 30, 2023,
with certain exceptions. Earlier application is encouraged.
GASB Statement No. 94, Public-Private and Public-Public Partnerships and
Availability Payment Arrangements (GASB 94)
GASB 94 establishes the definitions of public-private and public-public partnership arrangements
(PPPs) and availability payment arrangements (APAs). The statement also provides uniform
guidance on accounting and financial reporting for transactions that meet those definitions.
GASB 94 is effective for financial statements for the Village’s fiscal year ending April 30, 2024.
Earlier application is encouraged.
GASB Statement No. 95, Postponement of the Effective Dates of Certain
Authoritative Guidance (GASB 95)
In response to the challenges arising from COVID-19, on May 7, 2020, GASB-approved
Statement 95, Postponement of the Effective Dates of Certain Authoritative Guidance. GASB
approved an 18-month postponement for GASB 87, Leases. All statements and implementation
guides with a current effective date of reporting periods beginning after June 15, 2018, and later
have a one-year postponement. This change is effective immediately. Early application is still
encouraged. The effective dates on GASBs discussed above have already been adjusted to
account for the postponements issued in GASB 95.
The new effective dates are listed below:
• Statement 83 – reporting periods beginning after June 15, 2019
• Statement 84 and Implementation Guide 2019-2 – reporting periods beginning after
December 15, 2019
• Statement 87 and Implementation Guide 2019-3 – fiscal years beginning after June 15, 2021,
and all reporting periods thereafter
• Statement 88 – reporting periods beginning after June 15, 2019
• Statement 89 – reporting periods beginning after December 15, 2020
• Statement 90 – reporting periods beginning after December 15, 2019
• Statement 91 – reporting periods beginning after December 15, 2021
• Statement 92, paragraphs 6 and 7 – fiscal years beginning after June 15, 2021
• Statement 92, paragraphs 8, 9, and 12 – reporting periods beginning after June 15, 2021
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 8
• Statement 92, paragraph 10 – government acquisitions occurring in reporting periods
beginning after June 15, 2021
• Statement 93, paragraphs 13 and 14 – fiscal years beginning after June 15, 2021, and all
reporting periods thereafter
• Implementation Guide 2017-3, Questions 4.484 and 4.491 – the first reporting period in
which the measurement date of the (collective) net OPEB liability is on or after June 15, 2019
• Implementation Guide 2017-3, Questions 4.85, 4.103, 4.108, 4.109, 4.225, 4.239, 4.244,
4.245 and 5.1-5.4 – actuarial valuations as of December 15, 2018, or later
• Implementation Guide 2018-1 – reporting periods beginning after June 15, 2019
• Implementation Guide 2019-1 – reporting periods beginning after June 15, 2020.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements
(GASB 96)
GASB 96 provides guidance on governments utilizing more cloud-based solutions for their
information technology (IT) needs, and paying for the use of third-parties’ IT software on a
subscription basis. The accounting and financial reporting for what GASB refers to as
subscription-based information technology arrangements (SBITAs) has been inconsistent because
of a lack of authoritative guidance. The standard is effective for financial statements for the
Village’s fiscal year ending April 30, 2024, with early implementation encouraged. The
statement would be applied retroactively, using the facts and circumstances that exist at the
beginning of the fiscal year of implementation.
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation
Plans - an amendment of GASB Statements No. 14 and No. 84, and a supersession
of GASB Statement No. 32 (GASB 97)
GASB 97 amends guidance for determining financial accountability between the primary
government and a potential component unit (PCU). The new guidance pertains to instances
where the PCU does not have its own governing board and the primary government’s board is
effectively acting as the board of the PCU. In these instances, the primary government is
considered to have the equivalent of the ability to appoint a voting majority of the PCU.
However, this treatment would not apply to defined contribution pension/OPEB plans or defined
contribution other employee benefit plans (such as IRC 457 plans). The requirements, as they
relate to defined contribution pension/OPEB plans or other employee benefit plans, were
effective upon issuance of GASB 97. For all other arrangements, the effective date is for
financial statements for the Village’s fiscal year ending April 30, 2023.
GASB 97 also amends the criterion that a financial benefit or burden relationship exists if the
primary government is legally obligated or has otherwise assumed the responsibility to make
contributions to a pension or OPEB plan. This criterion now only applies to contribution
obligations to defined benefit pension or OPEB plans. This amended criterion was effective upon
issuance of GASB 97.
The Honorable Mayor
Board of Trustees
Village of Alsip, Illinois
Page 9
This communication is intended solely for the information and use of management, the Village Board and
others within the organization and is not intended to be and should not be used by anyone other than these
specified parties.
Oakbrook Terrace, Illinois
November 25, 2020
John D. Ryan
Mayor
Susan M. Petzel
Clerk and Collector
~Village
I @¼_}sip
Trustees
Richard S. Dalzell
Michael Zielinski
Monica M. Juarez
Christine L. McLawhorn
Christopher W. Murphy
Catalina Nava-Esparza
November 25, 2020
BKD, LLP
Certified Public Accountants
1901 S Meyers Road, Suite 500
Oakbrook Terrace, Illinois 60181
We are providing this letter in connection with your audit of our financial statements as of and for the year ended
April 30, 2020. We confirm that we are responsible for the fair presentation of the financial statements in conformity
with accounting principles generally accepted in the United States of America. We are also responsible for adopting
sound accounting policies, establishing and maintaining effective internal control over financial reporting,
operations and compliance, and preventing and detecting fraud
Certain representations in this letter are described as being limited to matters that are material. Items are considered
material, regardless of size, if they involve an omission or misstatement of accounting information that, in light of
surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information
would be changed or influenced by the omission or misstatement.
We confirm, to the best of our knowledge and belief, the following:
1. We have fulfilled our responsibilities, as set out in the terms of our engagement letter dated February
17, 2020, for the preparation and fair presentation of the financial statements in accordance with
accounting principles generally accepted in the United States of America.
2. The Village has restated the 2019 financial statements to conform with accounting principles
generally accepted in the United States of America. Management has provided you with all relevant
information regarding the restatement. We are not aware of any other known matters that require
correction in the financial statements.
3. We acknowledge our responsibility for the design, implementation and maintenance of internal
control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
4. We acknowledge our responsibility for the design, implementation and maintenance of internal
control to prevent and detect fraud.
5. We have reviewed and approved a draft of the financial statements and related notes referred to
above, which you prepared in connection with your audit of our financial statements. We
acknowledge that we are responsible for the fair presentation of the financial statements and related
notes.
4500 West I 23rd Street • Alsip, Illinois 60803-2599 • Phone 708-385-6902 • Fax 708-385-9561
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6. We have provided you with:
(a) Access to all information of which we are aware that is relevant to the preparation and fair
presentation of the financial statements such as records, documentation and other matters.
(b) Additional information that you have requested from us for the purpose of the audit.
( c) Unrestricted access to persons within the entity from whom you determined it necessary to
obtain audit evidence.
( d) All minutes of meetings of the governing body held through the date of this letter.
( e) All significant contracts and grants.
7. All transactions have been recorded in the accounting records and are reflected in the financial
statements.
8. We have informed you of all current risks of a material amount that are not adequately prevented or
detected by entity procedures with respect to:
(a) Misappropriation of assets.
(b) Misrepresented or misstated assets, liabilities or net position.
9. We believe the effects of the uncorrected financial statement misstatements summarized in the
attached schedule are immaterial, both individually and in the aggregate, to the financial statements
taken as a whole.
10. We have no knowledge of any known or suspected:
(a) Fraudulent financial reporting or misappropriation of assets involving management or
employees who have significant roles in internal control.
(b) Fraudulent financial reporting or misappropriation of assets involving others that could have a
material effect on the financial statements.
11. We have no knowledge of any allegations of fraud or suspected fraud affecting the Village received
in communications from employees, customers, regulators, suppliers or others.
12. We have disclosed to you the identity of the entity's related parties and all the related party
relationships and transactions of which we are aware. Related party relationships and transactions
have been appropriately accounted for and disclosed in accordance with accounting principles
generally accepted in the United States of America. We understand that the term related party refers
to an affiliate; management, and members of their immediate families, component units; and any
other party with which the entity may deal if it can significantly influence, or be influenced by, the
management or operating policies of the other. The term affiliate refers to a party that directly or
indirectly controls, or is controlled by, or is under common control with us.
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13. Except as reflected in the financial statements, there are no:
(a) Plans or intentions that may materially affect carrying values or classifications of assets and
liabilities.
(b) Material transactions omitted or improperly recorded in be financial statements.
( c) Material gain/loss contingencies requiring accrual or disclosure, including those arising from
environmental remediation obligations.
( d) Events occurring subsequent to the statement of net position/balance sheet date through the
date of this letter requiring adjustment or disclosure in the financial statements.
( e) Agreements to purchase assets previously sold.
(f) Restrictions on cash balances or compensating balance agreements.
(g) Guarantees, whether written or oral, under which the Village is contingently liable.
14. We have disclosed to you all known instances of noncompliance or suspected noncompliance with
laws and regulations whose effects should be considered when preparing financial statements.
15. We have no reason to believe the Village owes any penalties or payments under the Employer Shared
Responsibility Provisions of the Patient Protection and Affordable Care Act nor have we received
any correspondence from the IRS or other agencies indicating such payments may be due.
16. We have disclosed to you all known actual or possible litigation and claims whose effects should be
considered when preparing the financial statements. The effects of all known actual or possible
litigation and claims have been accounted for and disclosed in accordance with accounting principles
generally accepted in the United States of America.
17. Adequate provisions and allowances have been accrued for any material losses from:
(a) Uncollectible receivables.
18. Except as disclosed in the financial statements, we have:
(a) Satisfactory title to all recorded assets, and they are not subject to any liens, pledges or other
encumbrances.
(b) Complied with all aspects of contractual and grant agreements, for which noncompliance
would materially affect the financial statements.
19. We have not been designated as a potentially responsible par:y (PRP or equivalent status) by the
Environmental Protection Agency (EPA) or other cognizant regulatory agency with authority to
enforce environmental laws and regulations.
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20. With regard to deposit and investment activities:
(a) All deposit, repurchase and reverse repurchase agreements and investment transactions have
been made in accordance with legal and contractual requirements.
(b) Disclosures of deposit and investment balances and risks in the financial statements are
consistent with our understanding of the applicable laws regarding enforceability of any
pledges of collateral.
( c) We understand that your audit does not represent an opinion regarding the enforceability of
any collateral pledges.
21. With respect to any nonattest services you have provided us during the year, including preparation
of the financial statements and entity wide conversion adjustments:
(a) We have designated a qualified management-level individual to be responsible and accountable
for overseeing the nonattest services.
(b) We have established and monitored the performance of the nonattest services to ensure that
they meet our objectives.
(c) We have made any and all decisions involving management functions with respect to the
nonattest services and accept full responsibility for such decisions.
(d) We have evaluated the adequacy of the services performed and any findings that resulted.
22. We acknowledge that we are responsible for compliance with applicable laws, regulations and
provisions of contracts and grant agreements.
23. We have identified and disclosed to you all laws, regulations and provisions of contracts and grant
agreements that have a direct and material effect on the determination of amounts in our financial
statements or other financial data significant to the audit objectives.
24. We have identified and disclosed to you any violations or possible violations oflaws, regulations and
provisions of contracts and grant agreements whose effects should be considered for recognition
and/or disclosure in the financial statements or for your reporting on noncompliance.
25. We have taken or will take timely and appropriate steps to remedy any fraud, abuse, illegal acts or
violations of provisions of contracts or grant agreements that you or other auditors report.
26. We have a process to track the status of audit findings and recommendations.
27. We have identified to you any previous financial audits, attestation engagements, performance audits
or other studies related to the objectives of your audit and the corrective actions taken to address any
significant findings and recommendations made in such audits, attestation engagements or other
studies.
28. We have provided our views on any findings, conclusions and recommendations, as well as our
planned corrective actions with respect thereto, to you for inclusion in the findings and
recommendations referred to in your report on internal control over financial reporting and on
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com pliance and other matters based on your audit of the financial statem ents perform ed in accordance
with Government Auditing Standards.
29. The financial statements disclose all significant estimates and material concentrations known to us.
Significant estimates are estimates at the statement of net position/balance sheet date which could
change materially within the next year. Concentrations refer to volumes of business, revenues,
available sources of supply, or markets for which events could occur which would significantly
disrupt normal finances within the next year. Significant assumptions used by us in making
accounting estimates, including those measured at fair value, are reasonable.
30. The fair values of financial and nonfinancial assets and liabilities, if any, recognized in the financial
statements or disclosed in the notes thereto are reasonable estimates based on the methods and
assumptions. used. The methods and significant assumptions used result in measurements of fair
value appropriate for financial statement recognition and disclosure purposes and have been applied
consistently from period to period, taking into account any changes in circumstances. The significant
assumptions appropriately reflect market participant assumptions.
31. With respect to your audit of the TIF funds, we are responsible for understanding and complying
with the provisions of Subsection (q) of Section 11-74.4-3 of Public Act 85-1142, "An Act in Relation
to Tax Increment Financing," and have disclosed to you any and all instances of noncompliance with
those requirements occurring during the period of your audit or subsequent thereto to the date of this
letter of which we are aware. Except for any instances of noncompliance we may have disclosed to
you, we believe the Village has complied with all applicable compliance requirements.
32. The supplementary information required by the Governmental Accounting Standards Board,
consisting of management's discussion and analysis and pension and other postemployment benefit
information, has been prepared and is measured and presented in conformity with the applicable
GASB pronouncements, and we acknowledge our responsibility for the information. The
information contained therein is based on all facts, decisions and conditions currently known to us
and is measured using the same methods and assumptions as were used in the preparation of the
financial statements. We believe the significant assumptions underlying the measurement and/or
presentation of the information are reasonable and appropriate. There has been no change from the
preceding period in the methods of measurement and presentation.
33. With regard to supplementary information:
(a) We acknowledge our responsibility for the presentation of the supplementary information in
accordance with the applicable criteria.
(b) We believe the supplementary information is fairly presented, both in form and content, in
accordance with the applicable criteria.
( c) The methods of measurement and presentation of the supplementary information are
unchanged from those used in the prior period.
(d) We believe the significant assumptions or interpretations underlying the measurement and/or
presentation of the supplementary information are reasonable and appropriate.
( e) If the supplementary information is not presented with the audited financial statements, we
acknowledge we will make the audited financial statements readily available to intended users
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of the supplementary information no later than the date such information and the related
auditor's report are issued.
34. We are not aware of any asset retirement obligations or tax abatement agreements requmng
disclosure in the financial statements.
35. We acknowledge the current protracted economic decline continues to present difficult circumstances
and challenges for governments. Governmental entities are facing declines in the fair values of
investments and other assets, as well as declines in revenues. We understand the values of the assets
and liabilities recorded in the financial statements could change rapidly, resulting in material future
adjustments to asset values and allowances for accounts receivable that could negatively impact the
Village's ability to meet debt covenants or maintain sufficient liquidity. We acknowledge that you
have no responsibility for future changes caused by the current economic environment and the
resulting impact on the Village's financial statements. Further, management and the Board are solely
responsible for all aspects of managing the Village, including questioning the quality and valuation
of investments and other assets, reviewing allowances for uncollectible amounts and evaluating
capital needs and liquidity plans.
Before Subsequent to
Misstatements Misstatements Misstatements % Change
Total Assets & Deferred Outflows 84,225,039 84,225,039
Total Liabilities & Deferred Inflows (145,379,189) (163,019) (145,542,208) 0.11%
Total Net Position 61,154,150 163,019 61,317,169 0.27%
General Revenues & Transfers (24,774,421) (24,774,421)
Net Program Revenues/ Expenses 24,852,462 52,687 24,905,149 0.21%
Change in Net Position 78,041 52,687 130,728 67.51%
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Village of Alsip
ATTACHMENT
This analysis and the attached "Schedule of Uncorrected Misstatements (Adjustments Passed)" reflect the effects on the financial
statements if the uncorrected misstatements identified were corrected.
Governmental Activities (Government-Wide Statements)
QUANTITATIVE ANALYSIS
Governmental Activities (Government-Wide Statements)SCHEDULE OF UNCORRECTED MISSTATEMENTS (ADJUSTMENTS PASSED)Overall F/S Materiality: $580,000Performance Materiality: $440,000Use the new BKD custom ribbon to modifyPAJE Scope: $30,800the PAJE schedulePost toAWP0305?Assets LiabilitiesGeneral Revenues & TransfersNet Program Revenues/ Expenses Net PositionChange in Net PositionNet PositionYes (Y) Description Financial Statement Line ItemDR (CR) DR (CR) DR (CR) DR (CR) DR (CR) DR (CR) DR (CR)or No (N)To adjust IMRF Net Pension Liability and Deferred Inflows of Resources to balance per auditL.310 Factual0 (163,019) 0 120,933 42,086 (120,933) 120,933 Y Immaterial - corrected in FY20To adjust for overstated Oaklawn receivable in 2019D.303a F0 0 0 (68,246) 68,246 0 0 N Immaterial, posted correctly in 2020.00 000 0 0 00 000 0 0 00 000 0 0 00 000 0 0 Total passed adjustments0 (163,019) 0 52,687 110,332 (120,933) 120,933Impact on Change in Net Position52,687Impact on Net Position163,019Management's Reason(s) for Not Making an Adjustment to the F/SClient: Village of AlsipPeriod Ending: April 30, 2020Net Effect on Following YearAWP REFFactual (F), Judgmental (J) or Projected (P)
Before Subsequent to
Misstatements Misstatements Misstatements % Change
Total Assets & Deferred Outflows 51,551,556 (79,200) 51,472,356 -0.15%
Total Liabilities & Deferred Inflows (16,702,173) (54,195) (16,756,368) 0.32%
Total Net Position (34,849,383) 133,395 (34,715,988) -0.38%
General Revenues & Transfers (537,850) (537,850)
Net Program Revenues/ Expenses (2,826,167) 183,037 (2,643,130) -6.48%
Change in Net Position (3,364,017) 183,037 (3,180,980) -5.44%
Verify Debits and Credits have been entered correctly on the Menu-GA Tab
Village of Alsip
ATTACHMENT
This analysis and the attached "Schedule of Uncorrected Misstatements (Adjustments Passed)" reflect the effects on the financial
statements if the uncorrected misstatements identified were corrected.
Business Type Activities (Government-Wide Statements)
QUANTITATIVE ANALYSIS
Business-Type Activities (Government-Wide Statements)SCHEDULE OF UNCORRECTED MISSTATEMENTS (ADJUSTMENTS PASSED)Overall F/S Materiality: $380,000Performance Materiality: $290,000Use the new BKD custom ribbon to modifyPAJE Scope: $20,300the PAJE schedulePost toAWP0305?Assets LiabilitiesGeneral Revenues & TransfersNet Program Revenues/ Expenses Net PositionChange in Net PositionNet PositionYes (Y) Description Financial Statement Line ItemDR (CR) DR (CR) DR (CR) DR (CR) DR (CR) DR (CR) DR (CR)or No (N)To reflect restatement to beginnig net positionfor unexplained credit in fixed asset scheduleG.200F0 0 0 116,559 (116,559) 0 0 Y Management is unware of what the line item represents so choose to remove amount through current year expense rather than beginning net positionTo adjust IMRF Net Pension Liability and Deferred Inflows of Resources to balance per auditL.310 F0 (54,195) 0 40,204 13,991 (40,204) 40,204 N Client's preference is to book based off of actuary report. Unbilled disposal receivable/revenue recorded in water fund that should have been reflected in the general fund.D.001 F(79,200) 0 0 26,274 52,926 (26,274) 26,274 N Immaterial, revenue will transfer to correct fund next period.00 000 0 0 00 000 0 0 00 000 0 0 Total passed adjustments(79,200) (54,195) 0 183,037 (49,642) (66,478) 66,478Impact on Change in Net Position183,037Impact on Net Position133,395AWP REFFactual (F), Judgmental (J) or Projected (P)Management's Reason(s) for Not Making an Adjustment to the F/SClient: Village of AlsipPeriod Ending: April 30, 2020Net Effect on Following Year
Before Subsequent to
Misstatements Misstatements Misstatements % Change
Total Assets & Deferred Outflows 36,411,734 79,200 36,490,934 0.22%
Total Liabilities & Deferred Inflows (6,967,884) (6,967,884)
Total Fund Balance (29,443,850) (79,200) (29,523,050) 0.27%
Revenues (28,103,830) (94,520) (28,198,350) 0.34%
Expenditures 22,145,480 22,145,480
Change in Fund Balance (6,213,763) (94,520) (6,308,283) 1.52%
Village of Alsip
ATTACHMENT
This analysis and the attached "Schedule of Uncorrected Misstatements (Adjustments Passed)" reflect the effects on the
financial statements if the uncorrected misstatements identified were corrected.
General
QUANTITATIVE ANALYSIS
General SCHEDULE OF UNCORRECTED MISSTATEMENTS (ADJUSTMENTS PASSED)Overall F/S Materiality: $290,000Performance Materiality: $220,000PAJE Scope: $15,400Post toAWP0305?Assets & Deferred OutflowsLiabilities & Deferred InflowsChange in Fund BalanceFundBalanceYes (Y) Description Financial Statement Line ItemDR (CR) DR (CR) DR (CR) DR (CR) DR (CR) DR (CR) DR (CR)or No (N)Unbilled disposal receivable/revenue recorded in water fund that should have been reflected in the general fund.D.001 F79,200 0 (26,274) 0 (52,926) 26,274 (26,274)N Immaterial, revenue will transfer to correct fund next period.To adjust for overstated Oaklawn receivable in 2019D.303aF0 0 (68,246) 0 68,246 0 0 N Immaterial, posted correctly in 2020.00 000 0 0 00 000 0 0 00 000 0 0 00 000 0 0 Total passed adjustments79,200 0 (94,520) 0 15,320 26,274 (26,274)Impact on Change in Fund Balance(94,520)Impact on Fund Balance (79,200)Management's Reason(s) for Not Making an Adjustment to the F/SClient: Village of AlsipPeriod Ending: April 30, 2020RevenuesExpendituresFund BalanceNet Effect on Following YearAWP REFFactual (F), Judgmental (J) or Projected (P)
Before Subsequent toMisstatements Misstatements Misstatements % ChangeCurrent Assets 10,715,121 (79,200) 10,635,921 -0.74%Non-Current Assets & Deferred Outflows 20,098,988 20,098,988Current Liabilities (2,338,138) (2,338,138)Non-Current Liabilities & Deferred Inflows (10,018,365) (54,195) (10,072,560) 0.54%Current Ratio 4.583 4.549 -0.74%Total Assets & Deferred Outflows 30,814,109 (79,200) 30,734,909 -0.26%Total Liabilities & Deferred Inflows (12,356,503) (54,195) (12,410,698) 0.44%Total Net Position (18,457,606) 133,395 (18,324,211) -0.72%Operating Revenues (12,994,488) (12,994,488)Operating Expenses 10,858,041 26,274 10,884,315 0.24%Nonoperating (Revenues) Exp (35,516) 54,195 18,679 -152.59%Change in Net Position (2,213,969) 80,469 (2,133,500) -3.63%Village of AlsipATTACHMENTThis analysis and the attached "Schedule of Uncorrected Misstatements (Adjustments Passed)" reflect the effects on the financial statements if the uncorrected misstatements identified were corrected.Waterworks and Sewerage FundQUANTITATIVE ANALYSIS
Waterworks and Sewerage FundSCHEDULE OF UNCORRECTED MISSTATEMENTS (ADJUSTMENTS PASSED)Overall F/S Materiality: $240,000Performance Materiality: $180,000Use the new BKD custom ribbon to modifyPAJE Scope: $12,600the PAJE schedulePost toAWP0305?CurrentNoncurrentCurrentNoncurrentOperating RevenuesOperating ExpensesNonoperating (Revenues) ExpNet PositionChange in Net PositionNet PositionYes (Y) or No (N)Description Financial Statement Line ItemDR (CR) DR (CR) DR (CR) DR (CR) DR (CR)DR (CR) DR (CR) DR (CR) DR (CR) DR (CR)To adjust IMRF Net Pension Liability and Deferred Inflows of Resources to balance per auditL.310 F0 0 0 (54,195) 0 0 54,195 0 (40,204) 40,204 N Client's preference is to book based off of actuary report. Unbilled disposal receivable/revenue recorded in water fund that should have been reflected in the general fund.D.001F(79,200) 0 0 0 0 26,274 0 52,926 (26,274) 26,274 N Immaterial, revenue will transfer to correct fund next period.0000 0000 0 0 0000 0000 0 0 0000 0000 0 0 0000 0000 0 0 Total passed adjustments(79,200) 0 0 (54,195) 0 26,274 54,195 52,926 (66,478) 66,478Impact on Change in Net Position 80,469Impact on Net Position 133,395Management's Reason(s) for Not Making an Adjustment to the F/SClient: Village of AlsipPeriod Ending: April 30, 2020Assets & Deferred OutflowsLiabilities & Deferred InflowsNet Effect on Following YearFactual (F), Judgmental (J) or Projected (P)AWP REF
Before Subsequent toMisstatements Misstatements Misstatements % ChangeCurrent Assets 9,392,427 9,392,427Non-Current Assets & Deferred Outflows 11,345,020 11,345,020Current Liabilities (925,269) (925,269)Non-Current Liabilities & Deferred Inflows (3,420,401) (3,420,401)Current Ratio 10.151 10.151Total Assets & Deferred Outflows 20,737,447 20,737,447Total Liabilities & Deferred Inflows (4,345,670) (4,345,670)Total Net Position (16,391,777) (16,391,777)Operating Revenues (4,910,889) (4,910,889)Operating Expenses 3,678,867 116,559 3,795,426 3.17%Nonoperating (Revenues) Exp 81,974 81,974Change in Net Position (1,150,048) 116,559 (1,033,489) -10.14%Village of AlsipATTACHMENTThis analysis and the attached "Schedule of Uncorrected Misstatements (Adjustments Passed)" reflect the effects on the financial statements if the uncorrected misstatements identified were corrected.Senior Citizen ComplexQUANTITATIVE ANALYSIS
Senior Citizen ComplexSCHEDULE OF UNCORRECTED MISSTATEMENTS (ADJUSTMENTS PASSED)Overall F/S Materiality: $170,000Performance Materiality: $130,000Use the new BKD custom ribbon to modifyPAJE Scope: $9,100the PAJE schedulePost toAWP0305?CurrentNoncurrentCurrentNoncurrentOperating RevenuesOperating ExpensesNonoperating (Revenues) ExpNet PositionChange in Net PositionNet PositionYes (Y) or No (N)Description Financial Statement Line ItemDR (CR) DR (CR) DR (CR) DR (CR) DR (CR)DR (CR) DR (CR) DR (CR) DR (CR) DR (CR)To reflect restatement to beginnig net positionfor unexplained credit in fixed asset scheduleG.200F0 0 0 0 0 116,559 0 (116,559) 0 0 Y Management is unware of what the line item represents so choose to remove amount through current year expense rather than beginning net positionF0000 0000 0 0 0000 0000 0 0 0000 0000 0 0 0000 0000 0 0 0000 0000 0 0 Total passed adjustments0 0 0 0 0 116,559 0 (116,559) 0 0Impact on Change in Net Position 116,559Impact on Net Position 0AWP REFFactual (F), Judgmental (J) or Projected (P)Management's Reason(s) for Not Making an Adjustment to the F/SClient: Village of AlsipPeriod Ending: April 30, 2020Assets & Deferred OutflowsLiabilities & Deferred InflowsNet Effect on Following Year