Agenda - Council Work Session - 06/25/2013

Home

The following is a summary of our audit work, key conclusions, and other information that we consider important or that is required to be communicated to the City Council, administration, or those charged with governance of the City. AUDIT SUMMARY OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA, GOVERNMENT AUDITING STANDARDS, AND THE U.S. OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR A -133 We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended December 31, 2012. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and OMB Circular A -133, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you verbally and in our audit engagement letter. Professional standards also require that we communicate the following information related to our audit. PLANNED SCOPE AND TIMING OF THE AUDIT We performed the audit according to the planned scope and timing previously discussed and coordinated in order to obtain sufficient audit evidence and complete an effective audit. AUDIT OPINION AND FINDINGS Based on our audit of the City's financial statements for the year ended December 31, 2012: • We have issued an unqualified opinion on the City's basic fmancial statements. • We reported no matters involving the City's internal control over financial reporting that we consider to be material weaknesses. • The results of our testing disclosed no instances of noncompliance required to be reported under Government Auditing Standards. • We noted that the Schedule of Expenditures of Federal Awards is fairly stated, in all material respects, in relation to the basic financial statements. • We reported no deficiencies in the internal controls over compliance and its operation that we consider to be material weaknesses in our testing of major federal programs. • The results of our tests indicate that the City has complied, in all material respects, with the requirements that could have a direct and material effect on each major federal program. • There was one Minnesota Legal Compliance Finding in the current year. Minnesota Statutes require investments in mutual funds to have a rating in one of the two highest rating categories by at least one nationally recognized statistical ratings organization, and investments in general obligations of state or local government with taxing powers to have a rating of "A" or better. This requirement was not met for two investments at December 31, 2012. FOLLOW -UP ON PRIOR YEAR FINDINGS AND RECOMMENDATIONS As a part of our audit of the City's financial statements for the year ended December 31, 2012, we performed procedures to follow -up on the findings and recommendations that resulted from our prior year audit. During our audit for the year ended December 31, 2011, the City had a reportable instance of noncompliance with Minnesota laws and regulations. The City's deposits at December 31, 2011 exceeded federal insurance coverage. Excess deposits must be covered by corporate surety bonds or collateral that has a market value of at least 110 percent of such excess. This was not a finding for the current year.