STATE OF CONNECTICUT

State of Connecticut seal
AUDITORS OF PUBLIC ACCOUNTS
KEVIN P. JOHNSTON 210 CAPITOL AVENUE
HARTFORD, CONNECTICUT 06106-1559
ROBERT G. JAEKLE

INDEPENDENT AUDITORS' REPORT

Governor John G. Rowland
Members of the General Assembly

We have audited the accompanying combined civil list financial statements of the State of Connecticut as of and for the year ended June 30, 2002, as listed in the beginning of this report. These combined civil list financial statements are the responsibility of the State's management. Our responsibility is to express an opinion on these combined civil list financial statements based on our audit. We did not audit the financial statements of the Special Transportation Fund which represent 22 percent and 31 percent, respectively, of the assets and receipts of the Special Revenue Funds; we did not audit the financial statements of the Transportation Special Tax Obligations Fund, which represent 82 percent and 81 percent, respectively, of the assets and receipts of the Debt Service Funds; and we did not audit the financial statements of the Clean Water Fund-Federal Account, the Drinking Water Fund-Federal Account or that portion of the University Health Center Hospital Fund involving patient receivables, which represent 75 percent and 16 percent, respectively, of the assets and receipts of the Enterprise Funds. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for the aforementioned funds and accounts, is based solely on the reports of other auditors. All of the aforementioned audits were conducted in accordance with auditing standards generally accepted in the United States of America. In addition, the audits of the Clean Water Fund-Federal Account and Drinking Water Fund-Federal Account were conducted in accordance with standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

We conducted our audit 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, except that the audits of certain civil list funds of the State, as described above, were not conducted in accordance with Government Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined civil list financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall combined civil list financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinion.

As discussed in the note presented on the inside cover of this report, the State of Connecticut prepares its civil list financial statements on a modified cash basis, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.

The financial statements referred to above present only the civil list funds of the State of Connecticut and are not intended to present fairly the financial position and results of operations of the State of Connecticut in conformity with accounting principles generally accepted in the United States of America.

In our opinion, based on our audit and the reports of other auditors, the combined civil list financial statements referred to above present fairly, in all material respects, the financial position of the combined civil list funds as of June 30, 2002, and the cash transactions of such funds for the year then ended in conformity with the basis of accounting described in the note presented on the inside cover of this report.

In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2002, on our consideration of the State of Connecticut's internal control over budgetary-basis financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.

The State of Connecticut is a defendant in certain legal proceedings. The ultimate outcome of the litigation cannot presently be determined. Accordingly, no provision for any liability that may result upon adjudication has been made in the accompanying financial statements.

Our audit was performed for the purpose of forming an opinion on the combined civil list financial statements of the State of Connecticut taken as a whole. The combining and individual fund and account group financial statements and schedules, listed in the table of contents of the Annual Report of the State Comptroller, are presented for purposes of additional analysis and are not a required part of the combined civil list financial statements. Such information has been subjected to the auditing procedures applied in the audit of the combined civil list financial statements and, in our opinion, is fairly presented, in all material respects, in relation to the combined civil list financial statements taken as a whole.

We did not audit the data included in the sundry section of the Annual Report of the State Comptroller, and accordingly, express no opinion thereon.

Kevin P. Johnston Robert G. Jaekle
Auditor of Public Accounts Auditor of Public Accounts

December 31, 2002
State Capitol
Hartford, Connecticut

 

INDEPENDENT AUDITORS' REPORT
ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Governor John G. Rowland
Members of the General Assembly 

We have audited the combined civil list financial statements of the State of Connecticut, as of and for the year ended June 30, 2002 and have issued our report thereon dated December 31, 2002. We conducted our audit 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, except that the audits of certain component units of the State, as described in the aforementioned report on the combined civil list financial statements, were not conducted in accordance with Government Auditing Standards. 

Compliance: 

As part of obtaining reasonable assurance about whether the State of Connecticut's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 

However, we noted certain immaterial instances of noncompliance that we have reported, or will report, to the State's management in separately issued departmental audit reports covering the fiscal year ended June 30, 2002.

Internal Control Over Financial Reporting: 

In planning and performing our audit, we considered the State of Connecticut's internal control over budgetary-basis financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the combined civil list financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over budgetary-basis financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be a material weakness. A material weakness is a condition in which the design or operations of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over budgetary-basis financial reporting and its operation that we consider to be a material weakness. 

However, we noted other matters involving the internal control over budgetary-basis financial reporting that we have reported, or will report, to the State's management in separately issued departmental audit reports covering the fiscal year ended June 30, 2002. 

This report is intended for the information of the Governor, the State Comptroller, the Appropriations Committee of the General Assembly, and the Legislative Committee on Program Review and Investigations. However, this report is a matter of public record and its distribution is not limited.

Kevin P. Johnston Robert G. Jaekle
Auditor of Public Accounts Auditor of Public Accounts

December 31, 2002
State Capitol
Hartford, Connecticut