FairPoint Communications 2011 Annual Report Download - page 128
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Table of Contents
• Restricted access to shared administrator accounts to individuals with a valid business need for accessing those accounts; and
• Revised access to human resource, general ledger, accounts receivable, accounts payable, enterprise asset management, fixed assets, inventory,
purchase order and payroll functions within the Oracle system to eliminate certain segregation of duties issues.
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, project accounting controls were not adequate to ensure charges to capital projects were appropriate or that projects were
closed in a timely manner.
To resolve this issue, the following improvements were implemented:
• Implemented an account reconciliation software application to facilitate execution and management monitoring of account reconciliations;
• Enhanced the reconciliation procedures for various accounts, including the wholesale and retail accounts receivable reconciliations;
• Implemented upfront system edits and automated feed of project data between the engineering project management system used for outside plant
projects and the Oracle project accounting system;
• Implemented process for additional review of project charges prior to project close and established appropriate reserves for charges on open
projects;
We are committed to continuing to improve our internal control processes and will continue to review our financial reporting controls and procedures. As
we continue to evaluate and work to improve our internal control over financial reporting, we may identify additional measures to address these material
weaknesses or determine to modify certain of the remediation procedures described above. Our management, with the oversight of the audit committee of our
board of directors, will continue to assess and take steps to enhance the overall design and capability of our control environment in the future.
With the exception of the foregoing remediation actions and the changes described in the previous section, there have been no changes in our internal
control over financial reporting during the year ended December 31, 2011 that have materially affected or are reasonably likely to materially affect our internal
control over financial reporting.
See “Item 8. Financial Statements and Supplementary Data” for the Report of Management on Internal Control over Financial Reporting, which is
incorporated herein by reference.
See “Item 8. Financial Statements and Supplementary Data” for the Report of Independent Registered Public Accounting Firm on Internal Control over
Financial Reporting, which is incorporated herein by reference.
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