FairPoint Communications 2009 Annual Report Download - page 168

Table of Contents
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Not applicable.
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(a) Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this Annual Report, we carried out an evaluation, under the supervision and with the participation of our
management, including our principal executive officer and principal financial officer, of the effectiveness of our "disclosure controls and procedures" (as
defined in Rule 13a-15(e) of the Exchange Act). As a result of the Restatement described in "Part I—Business—Restatement", our management,
including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were not effective as of
December 31, 2009 because of the material weaknesses described below.
(b) Material Weaknesses in Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of, our principal
executive officer and principal financial officer, and effected by our board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable
possibility that a material misstatement in the reporting company's annual or interim financial statements will not be prevented or detected on a timely
basis.
Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2009 based upon criteria in
 issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such
evaluation, management determined that our internal control over financial reporting was not effective as of December 31, 2009 because the following
material weaknesses in internal control over financial reporting existed during 2009:
1. Our information technology controls were not adequate. Adequate testing was not performed to ensure that certain revenue transactions
were properly accounted for and transferred from our billing system to our general ledger. Also, access to our information systems was
not appropriately restricted.
2. Our management oversight and review procedures designed to monitor the accuracy of period-end accounting activities were ineffective.
Specifically, our account reconciliation processes were not adequate to properly identify and resolve discrepancies between our billing
system and our general ledger in a timely manner. In addition, control weaknesses existed relating to revenue, operating expenses,
accounts receivable, fixed assets and income taxes.
Effective in February 2010, our management believes that it has corrected the primary issues that led to the Restatement. Specifically, we have:
1. Corrected the billing system settings so that they properly transfer the identified transactions to the general ledger; and
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