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loll <br /> Page 2 <br /> Allocate Debt Payments <br /> The Organization ' s payments on certain notes payable were recorded as reductions of <br /> principal on the related debt without allocation of a portion of the payments to interest <br /> expense . We recommend the Organization record payments of principal and interest in <br /> accordance with the related notes payable amortization tables . <br /> Disposition of Prior Year Comments and Recommendations <br /> During our audit of the 2001 financial statements , we noted certain matters involving <br /> internal control that we reported in our letter dated August 31 , 2001 . A summary of <br /> those comments and the Organization ' s resolution follows : <br /> • Develop Formalized Accounting of Restricted Funds — we recommended that the <br /> Organization develop and maintain an ongoing analysis of restricted fund activity to <br /> ensure proper accountability of all restricted funds . The Organization developed an <br /> analysis during the year ended June 30, 2002 . <br /> • Maintain Donor Documentation — we recommended the Organization obtain <br /> documentation of donor intent in situations where such intent has been <br /> communicated verbally . The Organization obtained documentation of donor intent <br /> during the year ended June 30, 2002 . <br /> • Strengthen Bank Reconciliation Controls — we recommended the Organization ' s <br /> executive director review monthly bank reconciliations . In addition, we <br /> recommended old reconciling items be investigated and resolved on a timely basis . <br /> We noted these conditions had improved during the ' year ended June 30, 2002 ) <br /> however, we noted additional dated reconciling items in the June 30, 2002 bank <br /> reconciliation which should be investigated and resolved on a timely basis . <br /> These conditions were considered in determining the nature, timing, and extent of the <br /> audit tests applied in our audit of the 2002 financial statements, and this report does not <br /> affect our report on these financial statements dated September 12 , 2002 . We have not <br /> considered internal control since the date of our report . <br /> This report is intended solely for the information and use of the board of directors, <br /> management, and others within the organization. <br /> Very truly yours, <br /> AJ <br /> y , <br />