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Honorable Mayor and

Members of the Borough Council

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor's judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity's

preparation and fair presentation of the financial statements 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 entity'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

statements.

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

our audit opinions.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 of the financial statements, the financial statements are prepared by the Borough

of Milford on the basis of the financial reporting provisions prescribed by the Division of Local

Government Services, Department of Community Affairs, State of New Jersey, which is a basis of

accounting other than accounting principles generally accepted in the United States of America, to meet

the requirements of New Jersey.

The effects on the financial statements of the variances between the regulatory basis of accounting

described in Note I and accounting principles generally accepted in the United States of America,

although not reasonably determinable, are presumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the "Basis for Adverse Opinion on

U.S. Generally Accepted Accounting Principles" paragraph, the financial statements referred to above

do not present fairly, in accordance with accounting principles generally accepted in the United States

of America, the financial position of each fund of the Borough of Milford as of December 31, 2013 and

2012, or changes in financial position for the years then ended.

Basis for Qualified Opinion on Regulatory Basis Accounting Principles

We are unable to obtain sufficient evidence to support the cost of fixed assets. As more fully describe

in Note 1, due to the length of time over which these fixed assets were acquired, it is not practical to

determine their actual costs. We are, therefore, unable to express an opinion as to the general fixed

assets account group at at December 31, 2013, and 2012, stated as $5,031,771.00 and $5,031,771.00,

respectively.

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