Michael Cunningham, CPA is preparing a report on internal control in conjunction with an audit of the City of Warwick's June 30, 1999 financial statements. The audit is being conducted in accordance with the GAO's Government Auditing Standards. The City of Warwick has two transaction cycles: a revenue/receipt cycle and an expenditure/disbursement cycle. During the engagement, Cunningham noted one reportable condition:

Policies and procedures have not been implemented to subject material purchases to competitive bids. An experienced auditor, Cunningham has frequently reported on internal control under SAS No. 60, "Communication of Internal Control Structure Related Matters Noted in an Audit," but has never before performed an audit for a governmental entity.

Required:

1. How does Cunningham's responsibility for reporting on internal control under the GAO's Government Auditing Standards differ from his responsibility under SAS No.
60?

2. From the facts above, draft a report on internal control.