In response to the article in the Jan. 30 titled Cemetery District penalized by IRS, there are several points we believe are worthy of correction or clarification.
The article says, “Cloud Peak Accounting also failed to catch the error during a yearly audit of the district, according to John Zorbas, cemetery district board president.” We believe this statement leaves the false impression that there were deficiencies or mistakes in our engagement with the Cemetery District. Our engagement with district for the period in question was not an audit; but rather, a review of the financial statements for that period. The US Government Accountability Office (GAO) promulgates generally accepted government auditing standards (GAGAS) in the United States. GAGAS provide a framework for conducting audits, reviews and other attestation engagements for governmental entities. As Certified Public Accountants, when we have an engagement to review the financial statements of a governmental entity (such as the Johnson County Cemetery Board) we are obligated to conduct the engagement in accordance with these standards. Examining, confirming, or verifying an entity’s compliance with IRS rules and regulations associated with payroll taxes is beyond the scope of a review. Our engagement with the Cemetery Board to review the financial statements for the period in question met its stated objectives in every respect.
“Also during the meeting the board decided to draft requests for proposals to other accounting firms.” While it was not explicitly stated in the article, we believe the positioning of this statement in the article gives the impression that the board dropped Cloud Peak Accounting as a direct result of the IRS penalty issue. It is our understanding that the board’s decision to open the engagement to competitive bidding is simply a prudent, well-advised step by board leadership to ensure that governmental funds are being safeguarded and used wisely and efficiently. We support the board in this decision (and we are participating in the bidding process).
Kyle Mercer, CPA