CULLEN & DANOWSKI, LLP    
CERTIFIED PUBLIC ACCOUNTANTS November 1, 2019

Southampton Union Free School District
Southampton, New York
Dear Members of the Board:

In planning and performing our audit of the financial statements of the Southampton Union Free School District(District) as of and for the year ended June 30, 2019, in accordance with auditing standards generally accepted in the United States of America, we considered the District's internal control over financial reporting (internal control) as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control.

During our audit we became aware of other matters that are opportunities for strengthening internal controls and operating efficiencies. The memorandum that accompanies this letter summarizes our comments and suggestions concerning those matters. This letter does not affect our report dated November 1, 2019, on the financial statements of the Southampton Union Free School District.

We will review the status of these comments during our next audit engagement. We have already discussed these comments and suggestions with various District personnel, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to advise you about implementing the recommendations.

This communication is intended solely for the information and use of the Board of Education, Audit Committee, management, others you deem appropriate within the District, and any governmental authorities you need to share this information with. It is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

LUGO Y-  LEP

Cullen & Danowski, LLP

1650 ROUTE 112, PORT JEFFERSON STATION, NEW YORK 11776-3060

PHONE: 631-473-3400 • FAX: 631-473-4863 • WWW.CDLLP.NET

Southampton Union Free School District
For the Year Ended June 30, 2019

STATUS OF PRIOR YEAR COMMENTS

There were no prior year comments to report.

CURRENT YEAR COMMENT

Summer Placement Program Receivables

The District participates in the New York State Section 4408 summer placement program in which the District operates both an in-house and an out-placement program to provide services for special education students during the summer. For the out-placement services, the district typically receives 80% of the reimbursement from the New York State Education Department (NYSED) and the remaining 20% of the costs are subsidized by the general fund.

During our audit, we noted that District has been estimating and budgeting a 20% general fund subsidy to pay for the costs of providing these in-house services. However, upon further review of the actual costs of providing these services, it was determined that the costs are much higher and the general fund subsidy should be more than 20%. An adjustment was made at year end to better reflect the outstanding receivables in the special aid fund.

We recommend that the District review the associated costs of providing services for the 4408 program with their special education department and determine the appropriate estimate of the general fund subsidy to be budgeted annually.

Compensated Absences

The District records a liability for compensated absences, which are primarily unused sick days payable upon retirement based on contractual agreements.

During our current year audit, we noted that the compensated absences schedule calculation initially provided by the District had the incorrect rates and accumulated days for employees that did not tie out to nVision payroll records, Upon further inquiry, we noted that a detailed review of the compensated absences calculation prepared by the business office clerk had not been performed, therefore the errors in the schedule were not captured. Upon our request, the District updated the compensated absences schedule to reflect the correct pay rates and accumulated days.

We recommend that the District implement procedures to ensure that a thorough review of the accuracy of the compensated absences schedule is prepared on an annual basis. In addition, we recommend that someone independent of preparing the schedule review the data and calculations on the schedule prior to providing it to the auditors for review and use in the financial statements.

Southampton Union Free School District

For the Year Ended June 30, 2019

Disaster Recovery Plan Testing

The District should have controls that include the safeguarding of the financial accounting software and data to ensure the preservation of the records and the ability to process transaction without significant interruption.

During our current year audit, we noted that the District has developed a contingency plans for alternative processing of transactions in the event of loss or interruption of their network. However, upon further inquiry, we noted that this plan has not been tested to ensure that all financial information can be fully recovered.

We recommend that the District perform periodic testing of its disaster recovery plan to ensure that in the event of a significant interruption, the District's financial data can be properly restored and operational.

VINCENT D, CULLEN, CPA (1950-2013)
JAMES E. DANOWSK[, CPA PETER F. RODRIGUEZ, CPA
JILL S. SANDERS, CPA DONALD HOFFMANN, CPA
CHRISTOPHER V. REINO, CPA
ALAN YU, CPA

November 1, 2019

Cullen & Danowski, LLP

1650 Route 112

Port Jefferson Station, New York 11776-3060

We are providing this letter in connection with your audit of the statement of cash receipts and disbursements of the extraclassroom activity funds of the Southampton Union Free School District (District), for the year ended June 30, 2019, and the related note to the financial statement, for the purpose of expressing an opinion as to whether the financial statement presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds in accordance with the cash basis of accounting.

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 the 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, as of November 1, 2019, the following representations made to you during your audit.

Financial Statement

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated July 23, 2018, including our responsibility for the preparation and fair presentation of the financial statement in accordance with the cash basis of accounting.
2. The financial statement referred to above is fairly presented in conformity with the cash basis of accounting.
3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is 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.

70 Leland Lane • Southampton, NY 11968

Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.org

ANCHORING THE COMMUNITY

5. Related party relationships and transactions, if any, have been appropriately accounted for and disclosed.
6. Adjustments or disclosures have been made for all events, if any, subsequent to the date of the financial statement that would require adjustment to or disclosure in the financial statement.
7. The effects of all known actual or possible litigation, claims, and assessments have been accounted for and appropriately disclosed, if any.
8. Guarantees, whether written or oral, under which the District is contingently liable have been properly recorded or disclosed, if any.

Information Provided

9. We have provided you with:
   1. Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statement, such as records, documentation, and other matters and all audit relevant monitoring reports, if any, received from funding sources.
   2. Additional information that you have requested from us for the purpose of the audit.
   3. Unrestricted access to persons within the District from whom you determined it necessary to obtain audit evidence.
   4. Minutes of the meeting of the Board of Education and Audit Committee or summaries of actions of recent meetings for which minutes have not yet been prepared.
10. All material transactions have been recorded in the accounting records and are reflected in the financial statement.
11. We have disclosed to you the results of our assessment of the risk that the financial statement may be materially misstated as a result of fraud.
12. We have no knowledge of any fraud or suspected fraud that affects the District and involves:
    1. Management,
    2. Employees who have significant roles in internal control, or
    3. Others where the fraud could have a material effect on the financial statement.
13. We have no knowledge of any allegations of fraud or suspected fraud affecting the District's financial statement communicated by employees, former employees, regulators, or others.
14. We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing the financial statement.
15. We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statement.
16. We have disclosed to you the identity of the District's related parties and all the related party relationships and transactions of which we are aware.

Government - Specific

17. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
18. We have a process to track the status of audit findings and recommendations.
19. We have identified to you any previous audits, attestation engagements, or other studies related to the audit objectives and whether related recommendations have been implemented.
20. We have provided our views on reported findings, conclusions, and recommendations, as well as our planned corrective actions, for the report.
21. The District has no plans or intentions that may materially affect the carrying value or classification of cash.
22. We are responsible for compliance with the laws and regulations.
23. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that we believe have a material effect on the financial statement or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance, if any.
24. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statement or other financial data significant to the audit objectives, if any.
25. There are no violations or possible violations of laws and regulations whose effects should be considered for disclosure in the financial statement or as a basis for recording a loss contingency, or for reporting on noncompliance.
26. As part of your audit, you prepared the financial statement and related note. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for the financial statement and related note.
27. The District has satisfactory title to the cash asset, and there are no liens or encumbrances on such asset nor has the asset been pledged as collateral.
28. The District has complied with all aspects of contractual agreements that would have a material effect on the financial statement in the event of noncompliance.

​​​​​​​

November 1, 2019

Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060

We are providing this letter in connection with your audit of the statement of cash receipts and disbursements of the extraclassroom activity funds of the Southampton Union Free School District (District), for the year ended June 30, 2019, and the related note to the financial statement, for the purpose of expressing an opinion as to whether the financial statement presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds in accordance with the cash basis of accounting.

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 the 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, as of November 1, 2019, the following representations made to you during your audit.

Financial Statement

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated July 23, 2018, including our responsibility for the preparation and fair presentation of the financial statement in accordance with the cash basis of accounting.
2. The financial statement referred to above is fairly presented in conformity with the cash basis of accounting.
3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is 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.

70 Leland Lane • Southampton, NY 11968

Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.org

ANCHORING THE COMMUNITY

5. Related party relationships and transactions, if any, have been appropriately accounted for and disclosed.
6. Adjustments or disclosures have been made for all events, if any, subsequent to the date of the financial statement that would require adjustment to or disclosure in the financial statement.
7. The effects of all known actual or possible litigation, claims, and assessments have been accounted for and appropriately disclosed, if any.
8. Guarantees, whether written or oral, under which the District is contingently liable have been properly recorded or disclosed, if any.

Information Provided

9. We have provided you with:
   1. Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statement, such as records, documentation, and other matters and all audit relevant monitoring reports, if any, received from funding sources.
   2. Additional information that you have requested from us for the purpose of the audit.
   3. Unrestricted access to persons within the District from whom you determined it necessary to obtain audit evidence.
   4. Minutes of the meeting of the Board of Education and Audit Committee or summaries of actions of recent meetings for which minutes have not yet been prepared.
10. All material transactions have been recorded in the accounting records and are reflected in the financial statement.
11. We have disclosed to you the results of our assessment of the risk that the financial statement may be materially misstated as a result of fraud.
12. We have no knowledge of any fraud or suspected fraud that affects the District and involves:
    1. Management,
    2. Employees who have significant roles in internal control, or
    3. Others where the fraud could have a material effect on the financial statement.
13. We have no knowledge of any allegations of fraud or suspected fraud affecting the District's financial statement communicated by employees, former employees, regulators, or others.
14. We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing the financial statement.
15. We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statement.
16. We have disclosed to you the identity of the District's related parties and all the related party relationships and transactions of which we are aware.

Government - Specific

17. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
18. We have a process to track the status of audit findings and recommendations.
19. We have identified to you any previous audits, attestation engagements, or other studies related to the audit objectives and whether related recommendations have been implemented.
20. We have provided our views on reported findings, conclusions, and recommendations, as well as our planned corrective actions, for the report.
21. The District has no plans or intentions that may materially affect the carrying value or classification of cash.
22. We are responsible for compliance with the laws and regulations.
23. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that we believe have a material effect on the financial statement or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance, if any.
24. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statement or other financial data significant to the audit objectives, if any.
25. There are no violations or possible violations of laws and regulations whose effects should be considered for disclosure in the financial statement or as a basis for recording a loss contingency, or for reporting on noncompliance.
26. As part of your audit, you prepared the financial statement and related note. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for the financial statement and related note.
27. The District has satisfactory title to the cash asset, and there are no liens or encumbrances on such asset nor has the asset been pledged as collateral.
28. The District has complied with all aspects of contractual agreements that would have a material effect on the financial statement in the event of noncompliance.

​​​​​​​

November 1, 2019

Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060

We are providing this letter in connection with your audit of the financial statements of Southampton Union Free School District (District), which comprise the respective financial position of the governmental activities, each major fund and the fiduciary funds as of June 30, 2019 and the respective changes in financial position for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to whether the financial statements present fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

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 the 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, as of November 1, 2019, the following representations made to you during your audit.

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated July 23, 2018, including our responsibility for the preparation and fair presentation of the financial statements and for preparation of the supplementary information in accordance with the applicable criteria.
2. The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all properly classified funds and other financial information of the primary government and all component units required by generally accepted accounting principles to be included in the financial reporting entity.
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. Significant assumptions we used in making accounting estimates are reasonable.

70 Leland Lane • Southampton, NY 11968
Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.org

ANCHORING THE COMMUNITY

6. Related party relationships and transactions, including revenues, expenditures/ expenses, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP.
7. Adjustments or disclosures have been made for all events, including instances of noncompliance, subsequent to the date of the financial statements that would require adjustment to or disclosure in the financial statements.
8. The effects of all known actual or possible litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP.
9. Guarantees, whether written or oral, under which the District is contingently liable, if any, have been properly recorded or disclosed.

Information Provided

10. We have provided you with:
    1. 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 and all audit relevant monitoring reports, if any, received from funding sources.
    2. Additional information that you have requested from us for the purpose of the audit.
    3. Unrestricted access to persons within the District from whom you determined it necessary to obtain audit evidence.
    4. Minutes of the meeting of the Board of Education and Audit Committee or summaries of actions of recent meetings for which minutes have not yet been prepared.
11. All material transactions have been recorded in the accounting records and are reflected in the financial statements.
12. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.
13. We have no knowledge of any fraud or suspected fraud affecting the entity involving:
    1. Management,
    2. Employees who have significant roles in internal control, or

Others where the fraud could have a material effect on the financial statements.

14. We have no knowledge of any allegations of fraud or suspected fraud affecting the District's financial statements communicated by employees, former employees, regulators, or others.
15. We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing financial statements.
16. We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements.
17. We have disclosed to you the identity of the District's related parties and all the related party relationships and transactions of which we are aware.

Government — Specific

18. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
19. We have a process to track the status of audit findings and recommendations.
20. We have identified to you any previous audits, attestation engagements, or other studies related to the audit objectives and whether related recommendations have been implemented.
21. We have provided our views on reported findings, conclusions and recommendations, as well as our planned corrective actions, for the report.
22. The District has no plans or intentions that may materially affect the carrying value or classification of assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fund balance or net position.
23. We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracts; and legal and contractual provisions for reporting specific activities in separate funds.
24. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that we believe have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance, if any.
25. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of noncompliance with provisions of contracts and grant agreements that we believe have a material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, if any.
26. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statements or other financial data significant to the audit objectives, if any.
27. There are no violations or possible violations of budget ordinances, laws and regulations

(including those pertaining to adopting, approving, and amending budgets), provisions

of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, or for reporting on noncompliance.

28. As part of your audit, you assisted with the preparation of the financial statements and related notes. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for those financial statements and related notes.
29. The District has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.
30. The District has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
31. The financial statements include all component units appropriately present majority equity interests in legally separate organizations and joint ventures with an equity interest, and properly disclose all other joint ventures and other related organizations.
32. The financial statements properly classify all funds and activities in accordance with GASB Statement No. 34.
33. All funds that meet the quantitative criteria in GASB Statement Nos. 34 and 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users.
34. Components of net position (net investment in capital assets; restricted; and unrestricted) and classifications of fund balance (nonspendable, restricted, assigned and unassigned) are properly classified and, if applicable, approved.
35. Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis.
36. Revenues are appropriately classified in the statement of activities within program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal, as applicable.
37. Interfund, internal, and intra-entity activity and balances have been appropriately classified and reported, as applicable.
38. Deposits are properly classified as to risk, and are properly disclosed.
39. Capital assets, including infrastructure assets, and intangible assets are properly capitalized, reported, and, if applicable, depreciated.
40. We have appropriately disclosed and are following the District's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred

for purposes for which both restricted and unrestricted net assets are available and have determined that net assets were properly recognized under the policy.

41. We are following our established accounting policy regarding which resources (that is, restricted, committed, assigned or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. That policy determines the fund balance classification for financial reporting purposes.
42. We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI.
43. With respect to the schedule of change from adopted budget to final budget and the real property tax limit - general fund; the schedule of project expenditures and financing resources - capital projects fund; and the schedule of net investment in capital assets (collectively "other supplemental information")
    1. We acknowledge our responsibility for presenting the other supplementary information mentioned above in accordance with accounting principles generally accepted in the United States of America, and we believe the other supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. The methods of measurement and presentation of the other supplementary information have not changed from those used in the prior period, and we have disclosed to you any significant assumptions or interpretations underlying the measurement and presentation of the supplementary information.
    2. If the other supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon.
44. We agree with the findings of specialists (actuary) in evaluating the OPEB and have adequately considered the qualifications of the specialists in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists.
45. The census data provided to the actuary for the OPEB liabilities calculation is accurate.
46. We believe that the actuarial assumptions and methods used to measure pension assets/liabilities and OPEB liabilities and costs for financial accounting purposes are appropriate in the circumstances.
47. Amounts reported in the financial statements for payroll expense and related payroll taxes and retirement payments have been accrued through the end of the fiscal year, and represent payments to or for the benefit of bona fide employees of the District for services actually rendered at approved pay rates.
48. There are no civil rights suits or any other actions adjudicated or pending against the District that are not adequately covered by insurance.
49. The District has not been designated as a potentially responsible party by the Environmental Protection Agency.
50. If tax exempt bonds have been issued by the District, they have retained their tax exempt status.
51. We have no known tax abatement agreements which impact the District.
52. Form ST-3 which we provided to you is the same as the one which the District has filed, or will file.

November 1, 2019

Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060

We are providing this letter in connection with your audit of the statement of cash receipts and disbursements of the extraclassroom activity funds of the Southampton Union Free School District (District), for the year ended June 30, 2019, and the related note to the financial statement, for the purpose of expressing an opinion as to whether the financial statement presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds in accordance with the cash basis of accounting.

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 the 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, as of November 1, 2019, the following representations made to you during your audit.

Financial Statement

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated July 23, 2018, including our responsibility for the preparation and fair presentation of the financial statement in accordance with the cash basis of accounting.
2. The financial statement referred to above is fairly presented in conformity with the cash basis of accounting.
3. We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statement that is 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.

70 Leland Lane • Southampton, NY 11968

Phone: 631-591-4500 • Fax: 631-287-2870 • w%öW.southamptonschools.org

ANCHORING THE COMMUNITY

5. Related party relationships and transactions, if any, have been appropriately accounted for and disclosed.
6. Adjustments or disclosures have been made for all events, if any, subsequent to the date of the financial statement that would require adjustment to or disclosure in the financial statement.
7. The effects of all known actual or possible litigation, claims, and assessments have been accounted for and appropriately disclosed, if any.
8. Guarantees, whether written or oral, under which the District is contingently liable have been properly recorded or disclosed, if any.

Information Provided

9. We have provided you with:
   1. Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statement, such as records, documentation, and other matters and all audit relevant monitoring reports, if any, received from funding sources.
   2. Additional information that you have requested from us for the purpose of the audit.
   3. Unrestricted access to persons within the District from whom you determined it necessary to obtain audit evidence.
   4. Minutes of the meeting of the Board of Education and Audit Committee or summaries of actions of recent meetings for which minutes have not yet been prepared.
10. All material transactions have been recorded in the accounting records and are reflected in the financial statement.
11. We have disclosed to you the results of our assessment of the risk that the financial statement may be materially misstated as a result of fraud.
12. We have no knowledge of any fraud or suspected fraud that affects the District and involves:
    1. Management,
    2. Employees who have significant roles in internal control, or
    3. Others where the fraud could have a material effect on the financial statement.
13. We have no knowledge of any allegations of fraud or suspected fraud affecting the District's financial statement communicated by employees, former employees, regulators, or others.
14. We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing the financial statement.
15. We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statement.
16. We have disclosed to you the identity of the District's related parties and all the related party relationships and transactions of which we are aware.

Government - Specific

17. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
18. We have a process to track the status of audit findings and recommendations.
19. We have identified to you any previous audits, attestation engagements, or other studies related to the audit objectives and whether related recommendations have been implemented.
20. We have provided our views on reported findings, conclusions, and recommendations, as well as our planned corrective actions, for the report.
21. The District has no plans or intentions that may materially affect the carrying value or classification of cash.
22. We are responsible for compliance with the laws and regulations.
23. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that we believe have a material effect on the financial statement or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance, if any.
24. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statement or other financial data significant to the audit objectives, if any.
25. There are no violations or possible violations of laws and regulations whose effects should be considered for disclosure in the financial statement or as a basis for recording a loss contingency, or for reporting on noncompliance.
26. As part of your audit, you prepared the financial statement and related note. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for the financial statement and related note.
27. The District has satisfactory title to the cash asset, and there are no liens or encumbrances on such asset nor has the asset been pledged as collateral.
28. The District has complied with all aspects of contractual agreements that would have a material effect on the financial statement in the event of noncompliance.

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November 1, 2019

Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060

We are providing this letter in connection with your audit of the financial statements of Southampton Union Free School District (District), which comprise the respective financial position of the governmental activities, each major fund and the fiduciary funds as of June 30, 2019 and the respective changes in financial position for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to whether the financial statements present fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GMP).

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 the 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, as of November 1, 2019, the following representations made to you during your audit.

Financial Statements

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated July 23, 2018, including our responsibility for the preparation and fair presentation of the financial statements and for preparation of the supplementary information in accordance with the applicable criteria.
2. The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all properly classified funds and other financial information of the primary government and all component units required by generally accepted accounting principles to be included in the financial reporting entity.
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. Significant assumptions we used in making accounting estimates are reasonable.

70 Leland Lane • Southampton, NY 11968

Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.orz

ANCHORING THE COMMUNITY

6. Related party relationships and transactions, including revenues, expenditures/ expenses, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP.
7. Adjustments or disclosures have been made for all events, including instances of noncompliance, subsequent to the date of the financial statements that would require adjustment to or disclosure in the financial statements.
8. The effects of all known actual or possible litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP.
9. Guarantees, whether written or oral, under which the District is contingently liable, if any, have been properly recorded or disclosed.

Information Provided

10. We have provided you with:
    1. 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 and all audit relevant monitoring reports, if any, received from funding sources.
    2. Additional information that you have requested from us for the purpose of the audit.
    3. Unrestricted access to persons within the District from whom you determined it necessary to obtain audit evidence.
    4. Minutes of the meeting of the Board of Education and Audit Committee or summaries of actions of recent meetings for which minutes have not yet been
11. All material transactions have been recorded in the accounting records and are reflected in the financial statements.
12. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.
13. We have no knowledge of any fraud or suspected fraud affecting the entity involving:
    1. Management,
    2. Employees who have significant roles in internal control, or
    3. Others where the fraud could have a material effect on the financial statements.
14. We have no knowledge of any allegations of fraud or suspected fraud affecting the District's financial statements communicated by employees, former employees, regulators, or others.
15. We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing financial statements.
16. We have disclosed to you all known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements.
17. We have disclosed to you the identity of the District's related parties and all the related party relationships and transactions of which we are aware.

Government - Specific

18. There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
19. We have a process to track the status of audit findings and recommendations.
20. We have identified to you any previous audits, attestation engagements, or other studies related to the audit objectives and whether related recommendations have been implemented.
21. We have provided our views on reported findings, conclusions and recommendations, as well as our planned corrective actions, for the report.
22. The District has no plans or intentions that may materially affect the carrying value or classification of assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fund balance or net position.
23. We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracts; and legal and contractual provisions for reporting specific activities in separate funds.
24. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that we believe have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance, if any.
25. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of noncompliance with provisions of contracts and grant agreements that we believe have a material effect on the determination of financial statement amounts or other financial data significant to the audit objectives, if any.
26. We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statements or other financial data significant to the audit objectives, if any.
27. There are no violations or possible violations of budget ordinances, laws and regulations (including those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, or for reporting on noncompliance.
28. As part of your audit, you assisted with the preparation of the financial statements and related notes. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for those financial statements and related notes.
29. The District has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.

• The District has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
• The financial statements include all component units appropriately present majority equity interests in legally separate organizations and joint ventures with an equity interest, and properly disclose all other joint ventures and other related organizations.
• The financial statements properly classify all funds and activities in accordance with GASB Statement No. 34.
• All funds that meet the quantitative criteria in GASB Statement Nos. 34 and 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users.
• Components of net position (net investment in capital assets; restricted; and unrestricted) and classifications of fund balance (nonspendable, restricted, assigned and unassigned) are properly classified and, if applicable, approved.
• Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis.
• Revenues are appropriately classified in the statement of activities within program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal, as applicable.
• Interfund, internal, and intra-entity activity and balances have been appropriately classified and reported, as applicable.
• Deposits are properly classified as to risk, and are properly disclosed.
• Capital assets, including infrastructure assets, and intangible assets are properly capitalized, reported, and, if applicable, depreciated.
• We have appropriately disclosed and are following the District's policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available and have determined that net assets were properly recognized under the policy.
• We are following our established accounting policy regarding which resources (that is, restricted, committed, assigned or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. That policy determines the fund balance classification for financial reporting purposes.
• We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI.
• With respect to the schedule of change from adopted budget to final budget and the real property tax limit - general fund; the schedule of project expenditures and financing resources - capital projects fund; and the schedule of net investment in capital assets (collectively "other supplemental information")
  1. We acknowledge our responsibility for presenting the other supplementary information mentioned above in accordance with accounting principles generally accepted in the United States of America, and we believe the other supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America. The methods of measurement and presentation of the other supplementary information have not changed from those used in the prior period, and we have disclosed to you any significant assumptions or interpretations underlying the measurement and presentation of the supplementary information.
  2. If the other supplementary information is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date we issue the supplementary information and the auditor's report thereon.
• We agree with the findings of specialists (actuary) in evaluating the OPEB and have adequately considered the qualifications of the specialists in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the
• The census data provided to the actuary for the OPEB liabilities calculation is accurate.
• We believe that the actuarial assumptions and methods used to measure pension assets/liabilities and OPEB liabilities and costs for financial accounting purposes are appropriate in the circumstances.
• Amounts reported in the financial statements for payroll expense and related payroll taxes and retirement payments have been accrued through the end of the fiscal year, and represent payments to or for the benefit of bona fide employees of the District for services actually rendered at approved pay rates.
• There are no civil rights suits or any other actions adjudicated or pending against the District that are not adequately covered by insurance.
• The District has not been designated as a potentially responsible party by the Environmental Protection Agency.
• If tax exempt bonds have been issued by the District, they have retained their tax exempt status.
• We have no known tax abatement agreements which impact the District.
• Form ST-3 which we provided to you is the same as the one which the District has filed,

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SOUTHAMPTON UNION FREE SCHOOL DISTRICT
EXTRACLASSROOM ACTIVITY FUNDS

FINANCIAL STATEMENT WITH

INDEPENDENT AUDITOR'S REPORT

June 30, 2018

SOUTHAMPTON UNION FREE SCHOOL DISTRICT EXTRACLASSROOM ACTIVITY FUNDS

Table of Contents

Independent Auditor's Report                                      1

Financial Statement

Statement of Cash Receipts and Disbursements     3

Note to Financial Statement                                  4

CULLEN & DANOWSKI, LLP
CERTIFIED PUBLIC ACCOUNTANTS

VINCENT D, CULLEN, CPA
JAMES E. DANOWSKI, CPA
PETER F. RODRIGUEZ, CPA
JILL S. SANDERS, CPA
DONALD J, HOFFMANN, CPA
CHRISTOPHER V. REINO, CPA
ALAN YO, CPA

INDEPENDENT AUDITOR'S REPORT

To the Board of Education
Southampton Union Free School District
Southampton, New York

We have audited the accompanying Statement of Cash Receipts and Disbursements of the Southampton Union Free School District's (District) extraclassroom activity funds for the year ended June 30, 2018, and the related note to the financial statement.

Management's Responsibility for the Financial Statement

Management is responsible for the preparation and fair presentation of this financial statement in accordance with the cash basis of accounting described in Note I.B. Management is also responsible 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.

Auditor's Responsibility

Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District's preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

1650 ROUTE 112, PORT JEFFERSON STATION, NEW YORK 11776-3060

PHONE: 631-473-3400 • FAX: 631-473-4863 WWW.CDLLP.NET

Basis for Qualified Opinion

The cash receipts records of the student clubs within the extraclassroom activity funds of the Southampton Union Free School District were not adequate to permit the application of auditing procedures to indicate whether the receipts recorded represent all receipts collected by the clubs.

Qualified Opinion

In our opinion, except for the effect of any adjustments that might have been necessary had we been able to perform adequate auditing procedures in regard to the receipts referred to in the Basis for Qualified Opinion paragraph, the financial statement referred to in the first paragraph presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds of the Southampton Union Free School District for the year ended June 30, 2018, on the basis of accounting described in Note I.B.

Basis of Accounting

We draw attention to Note I.B. of the financial statement, which describes the basis of accounting. This financial statement is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter.

SOUTHAMPTON UNION FREE SCHOOL DISTRICT EXTRACLASSROOM ACTIVITY FUNDS

STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS

For the Year Ended June 30, 2018

See Note to Financial Statement

SOUTHAMPTON UNION FREE SCHOOL DISTRICT EXTRACLASSROOM ACTIVITY FUNDS NOTE TO FINANCIAL STATEMENT June 30, 2018

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Financial Reporting Entity

The extraclassroom activity funds represent funds of the students of the Southampton Union Free School District (District). Although, the extraclassroom activity funds are independent of the District with respect to its financial transactions and the designation of student management, the Board of Education exercises general oversight of these funds. Based on this criterion, the extraclassroom activity funds are included in the District's reporting entity. The District reports assets held by it as agent for the extraclassroom organizations in an agency fund in the Statement of Fiduciary Net Position - Fiduciary Funds.

1. Basis of Accounting

The accompanying financial statement has been prepared on the cash receipts and disbursements basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Under that basis, the only asset recognized is cash, and no liabilities are recognized. All transactions are recognized as either cash receipts or disbursements, and noncash transactions are not recognized. The cash basis differs from generally accepted accounting principles primarily because receivables and payables, inventory, long-lived assets, and accrued income and expenses, which would be recognized under accounting principles generally accepted in the United States of America, and which may be material in amount, are not recognized in the accompanying financial statement.