July 15, 2010

The Public Employee Retirement Administration Commission has completed a review of the audit of the Barnstable County Retirement System conducted by the firm of Sullivan, Rogers & Co. CPA’s in accordance with the provisions of Chapter 32, Section 21 of the Massachusetts General Laws. The audit covered the period from January 1, 2005 to December 31, 2007. This audit was determined to be conducted in accordance with the accounting and management standards established by the Public Employee Retirement Administration Commission, in regulation 840 CMR 25.00 and in compliance with the provisions specified in PERAC Memo #20/2008.

We conducted an inspection of the work papers prepared by Sullivan, Rogers & Co., CPA’s at their offices in Burlington on November 18, 2009. We determined that the audit was conducted in a competent professional manner and the work papers demonstrated that audit tests and procedures were performed in sufficient detail to allow us to accept the final audit report as issued.

We identified specific differences between this financial audit designed to provide an opinion on financial statements and our compliance audit designed to ensure adherence with the statute and regulations specific to the operations of a regional multiple employer defined benefit pension plan.

Accordingly, we supplemented the field work conducted in this audit by Sullivan, Rogers & Co., CPA’s with certain limited procedures designed to provide additional assurance that the accounting and management standards established by the Public Employee Retirement Administration Commission, contained in Regulation 840 CMR 25.00 were adhered to and complied with. We also inspected certain records of the Barnstable County Retirement System to identify unresolved issues related to investments, 91A compliance, disability issues, including remands, and supplemental regulations. In addition, we tested compliance with the interest rules for refunds; inspected payroll records to confirm benefit calculations; compared deduction reports to actual payroll source records; and initiated inquiries with many of the employer participating units to determine the basis for member contributions and certain other procedures.

In our opinion, the financial records are being maintained and the management functions are being performed in conformity with the standards established by the Public Employee Retirement Administration Commission, with the exception of those specifically noted in the Report on Internal Control (and Management Letter) prepared by the firm of Sullivan, Rogers & Co. CPA’s and presented as a part of this report. The content of such document has been posted on the PERAC web page as presented in the final version submitted by Sullivan, Rogers & Co. to the Barnstable County Retirement Board.

It should be noted that the financial statements included in this audit report were based on the work performed and the tests conducted during the time the audit was conducted for the period referenced in the opinion dated January 15, 2010. This audit was not performed by employees or representatives of the Public Employee Retirement Administration Commission.

It should be noted that the opinion expressed in this audit report were based on the Laws and Regulations in effect during the time the audit was conducted for the period referenced in this report. This opinion does not reflect the changes made to Chapter 32 after passage of Chapter 21 of the Acts of 2009.

The financial statements and footnotes presented in this report were limited to the express results as of and for the period ended December 31, 2007. Other reports express an opinion on the financial statements as of and for the periods ending December 31, 2006 and 2005. That information and the complete reports for those respective periods are available upon request.

In closing, I wish to acknowledge the work of Sullivan, Rogers & Co. CPA’s who conducted this examination, and express my appreciation to the Board of Retirement and staff for their courtesy and cooperation. It should be noted that PERAC audit staff will follow up in six months to ensure that appropriate actions have been taken regarding all material weaknesses and deficiencies in internal control, and to include the review of one ongoing 91A compliance case before the Board. In addition, this visit will allow us to determine that all matters and opportunities to strengthen internal controls and improve operating efficiency have been appropriately considered.

Sincerely,

Joseph E. Connarton
Executive Director